In the recent years, the Goods and Services Tax (GST) regime in India has given more power to the tax authorities to conduct searches and seizures. Under the GST law, search and seizure operations are carried out when there are reasonable grounds to believe that a person is concealing or has concealed goods or has furnished or is furnishing inaccurate information about such goods.
During the search, the tax authorities have the power to seize any goods that they believe are liable to confiscation under the GST law. They can also seal the premises, documents or assets to prevent the tampering or removal of any evidence. In this article, we will discuss the provisions related to seizure and sealing during search under GST in detail.
Seizure is the process of taking possession of any goods, documents or assets by the tax authorities. The seized goods are kept in the custody of the tax authorities until the completion of the proceedings under the GST law. Sealing refers to the action of affixing a seal on any premises, documents or assets to prevent the tampering or removal of any evidence.
The seizure and sealing during search under GST are carried out by the proper officer. The proper officer is the officer who is authorized by the Commissioner of CGST/SGST to exercise the powers under the GST law.
Seizure and sealing during search under GST can be carried out when there are reasonable grounds to believe that:
1. A person is concealing or has concealed goods that are liable to confiscation under the GST law
2. Furnished or is furnishing inaccurate information about such goods
3. Suppressing or has suppressed any transaction or valuable information that is liable to affect his liability to pay tax under the GST law
4. Tampering or has tampered with any evidence that is relevant in any proceeding under the GST law
The procedure for seizure and sealing during search under GST is as follows:
1. Proper officer shall prepare a panchnama, which is a record of the search proceedings
2. Panchnama shall contain the details of the goods, documents or assets seized or sealed
3. Proper officer shall issue a notice to the person from whom the goods, documents or assets are seized or sealed
4. Shall be given an opportunity of being heard before the goods, documents or assets are confiscated
5. Fails to show cause as to why the goods, documents or assets should not be confiscated, the proper officer may order the confiscation of the same
6. Confiscated goods shall be sold, and the proceeds shall be deposited in the government account
7. Seal shall be removed by the proper officer only after the completion of the proceedings under the GST law
If the proper officer seizes or seals any goods, documents or assets without any reasonable grounds, he shall be liable to pay compensation to the person affected by such action. The amount of compensation shall be paid by the officer from his own resources.
If the person from whom the goods, documents or assets are seized or sealed furnishes inaccurate information or suppresses any transaction or valuable information, he shall be liable to pay a penalty under the GST law. The penalty shall be equal to the tax payable on such goods, documents or assets.
Seizure and sealing during search under GST are the powerful tools available to the tax authorities to ensure compliance with the GST law. However, these powers should be exercised judiciously and only when there are reasonable grounds to believe that a person is violating the GST law.
The procedure for seizure and sealing during search under GST is clearly defined under the GST law. It is, therefore, essential for the taxpayers to be aware of their rights and responsibilities under the law to avoid any unnecessary harassment or penalty.
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