Inspection, Search, Seizure and Arrest – CA Final IDT Study Material is designed strictly as per the latest syllabus and exam pattern.
Inspection, Search, Seizure and Arrest – CA Final IDT Study Material
Question 1.
Who can order for carrying out “Inspection and under what circumstances”?
Answer:
(a) As per Section 67 of CGST Act:
- Inspection can be carried out
- by proper officer
- only upon a written authorization
- given by an officer of the rank of Joint Commissioner or above.
(b) Circumstances for Carrying out Inspection
A Joint Commissioner or an officer higher in rank can give such authorization only if he has reasons to believe that:
- Transaction w.r.t. supply of goods/services/both is suppressed
- Transaction w.r.t. goods (stock) in hand
- Excess ITC has been claimed
- Indulged in contravention of Act
- Business of transporting goods
- Owner / operator of warehouse /godown – Storing goods which have escaped payment of tax
- Maintenance of accounts likely to cause evasion of duty
Question 2.
What is meant by ‘reasons to believe’?
Answer:
Meaning:
- Reason to believe is to have knowledge of facts
- which, although not amounting to direct knowledge
- would cause a reasonable person
- knowing the same facts, to reasonably conclude the same thing.
As per Section 26 of the IPC, 1860, “A person is said to have ‘reason to believe’ a thing, if he has sufficient cause to believe that thing but not otherwise.” ‘Reason to believe’ contemplates an objective determination based on intelligent care and evaluation as distinguished from a purely subjective consideration. It has to be and must be that of an honest and reasonable person based on relevant material and circumstances.
Question 3.
What powers can be exercised by an officer during valid search?
Answer:
An officer carrying out a search has the power
- to search for and seize goods (which are liable to confiscation) and
- documents/books/things (relevant for any proceedings under the Act)
- from the premises searched.
However, if it is not practicable to seize any such goods then the same may be detained:
- The person from whom these are seized
- shall be entitled to take copies/extracts of
- seized records.
During search:
1. The officer has the power to break open the door of the premises authorized to be searched if access to the same is denied.
2. Similarly, while carrying out search within the premises, he can break open any almirah or box if access to such almirah or box is denied and in which any goods, account, registers or documents are suspected to be concealed. He can also seal the premises if access to it denied.
Time of retention
- The seized documents/books/things shall be retained only
- till the time the same are required for examination/enquiry/proceedings and
- if these are not relied on for the case then
- the same shall be returned within 30 days from the issuance of show cause notice.
Question 4.
What are the safeguard as per Section 67 in respect of search and seizure?
Answer:
As per section 67 of CGST Act in respect of the power of search or seizure the safeguards are as follows:
1. Seized goods or documents should not be retained beyond the period necessary for their examination.
2. Photocopies of the documents can be taken by the person from whose custody documents are seized.
3. For seized goods, if a notice is not issued within 6 months of its seizure, goods shall be returned to the person from whose possession it was seized. This period of 6 months can be extended on justified grounds up to a further period of maximum 6 months.
4. An inventory of seized goods shall be made by the seizing officer.
5. Certain specified categories of goods such as perishable, hazardous etc. can be disposed of immediately after seizure.
Question 5.
What are the provisions of regarding inspection of goods in movements?
Answer:
- Inspection can also be done of the conveyance, carrying a consignment of value exceeding specified limit.
- The person in charge of the conveyance has to produce prescribed documents/devices for verification and allow inspection.
- E-way Bill has been prescribed for the said purpose.
- Inspection during transit can be done even without authorisation of Joint Commissioner.
Question 6.
Explain the safeguards provided under section 69 of CGST Act, 2017, to a person who is placed under arrest? [May 2018, Old, 4 Marks]
Answer:
Section 69 of CGST Act, 2017 Following safeguards to a person who is placed under arrest:
| (a) If a person is arrested for a Cognizable Offence |
|
| (b) If a person is arrested for a NON-Cognizable Offence |
|
| (c) All arrest must be in accordance with the provisions of the Code of Criminal Procedure relating to arrest in terms of section 69(3) of CGST Act, 2017. | |
Examiner’s Comment
The requirement of the question is to explain the safeguards to a person who is placed under arrest. Some of the examinees did not mention the safeguards in respect of cognizable and non-cognizable offences and thus, did not get full marks.
Question 7.
Explain the provision related to Arrest?
Answer:
Section 69 of the CGST Act, 2017 :
Basis of arrest
Arrests can be carried out only where the person is accused of offences specified for this purpose and the tax amount involved is more than specified limit.
Specified Offences
- Supplies with/without invoice with the intention to evade tax
- Issues incorrect invoice
- Avails credit on incorrect bill
- Collects amount but does not pay to the Government beyond a period of three months
Authorisation to arrest
The arrests under GST Act can be made only under authorization from the Commissioner.
Whenever the Commissioner has reason to believe that any person has committed an such offence, he can authorize any other officer subordinate to him, to arrest such person.
Nature of Offences
The nature of offences which offences are thus punishable with imprisonment are as per Section 132 of the Act.
This essentially means that a person can be arrested only where the tax evasion is more than ₹ 2 Crore.
However, the Monetary Limit shall not be applicable if the offences are committed again even after being convicted earlier i.e. repeat offender of the specified offences can be arrested irrespective of the tax amount involved in the case.
Authorisation of Arrest by proper Officer
The commissioner can Authorize an officer to arrest a person if he has reasons to believe that the person has committed an offence attracting a punishment prescribed under section 132 of the CGST Act.
| (a) If a person is arrested for a Cognizable Offence |
|
| (b) If a person is arrested for a NON-Cognizable and bailable Offence |
It means the Deputy/Assistant Commissioner can release him on bail and he will be subject to the same provisions as an officer in-charge of a police station u/s 436 of the Code of Criminal Procedure, 1973 |
| (c) All arrest must be in accordance with the provisions of the Code of Criminal Procedure relating to arrest in terms of section 69(3) of CGST Act, 2017. | |
Question 8.
When can the proper officer Issue summons under CGST Act?
Answer:
- Section 70 of CGST/SGST Act gives po\vers to a duly authorized CGST/SGST officer to call upon a person
- by issuing a summon to present himself
- before the officer issuing the summon
- to either give evidence or
- produceadocurnentor
- any other thing in am inquiry which an officer is making.
- A summons to produce documents or other things ma be
- for the production of certain specified documents or things or
- for the production of all documents or things of a certain description in the possession or under the control of the person summoned.
Question 9.
Enumerate the records which are to be produced during access to business premises under section 71 of the CGST Act, 2017? [MTP, May 18, 2 Marks]
Answer:
The following records are to be produced, if called for, during access to business premises under section 71 of the CGST Act, 2017.
- The records prepared and maintained by the registered person and declared to the proper officer in the prescribed manner.
- Trial balance or its equivalent.
- Statements of annual financial accounts, duly audited.
- Cost audit report, if any.
- The income – tax audit report, if any.
- Any other relevant record.