Search on Taxpayer Premises under GST

Search operations, in general, are conducted to examine a person, place or thing, in order to assess or scrutinize the same through analyzing various documents or evidence. Search operations can only be conducted by the valid authorities of the law. The purpose of this article is to highlight various aspects of a search of taxpayer premises under GST.

The Rights to Order

Only an officer of the rank of Joint Commissioner or above shall execute the order of search and seizure of documents only with legible reasons to believe in the existence of goods to be confiscated, or any relevant documents, or books, or things, kept hidden by the individual.

Search Warrant

Search warrant is an order which conveys the right to search, which is mandatory to conduct any search operations. The right to order a search warrant is left to the proper officer, who should be an officer of the rank of a joint commissioner or above. The search warrant must emphasize the reason that led to the search. It must contain the following details:

The violation under the Act
The premise to be searched
The name and designation of the person authorized to search
The name of the issuing officer and designation along with his round seal
Date and place of issue
Serial number of the search warrant
Period of validity

Click here to read on Bond for Release of Seized Goods under GST

Confiscation of Goods

Goods are liable to be confiscated on occasions:

Where supplies or receipts which are an infringement of the provisions or rules, thereby leading to evasion of tax.
Where a taxpayer does not account for any goods for which he is liable to pay taxes.
Where supplies of taxable goods are made without applying for GST registration.
Any breach or neglect of law with the intention to evade taxes.

Powers of an Officer

A proper officer as authorized to conduct the search operations can execute the following:

Break open the entry doors of a premise on denial of access.
Break open the utilities of a house like a cupboard or a suitcase, if access is denied towards the same.
The right to search and seize any goods which are liable to be confiscated.
The right to seal the premises on denial of access.

Code of Conduct of Search Operations

The following describes the code of conduct for Search operations:

The authority shall enforce Search operations only after producing a search warrant.
The searching squad must always include a lady officer.
On arrival, the proper officers must identify themselves with an identity card.
The authority should obtain a signature from the people in-charge of the premises as well as the signature of two witnesses before starting the search.
The two witnesses mentioned above must observe the search. The witnesses must belong to the locality. If none of the people in the locality agrees to act as a witness, the authority should bring inhabitants from another locality. The concerned shall also brief the witnesses on the purpose of the search.
The officers in-charge of the search must offer to search themselves personally before and after the operation.
All the details of the search by the authorized offer should reflect in Panchama/Mahazar. This report shall duly contain the signature of the witnesses, as well as the person in-charge of the premises.
After the search, the concerned authority should provide a copy of the Panchama/Mahazar to the person in-charge of the premises.
After the completion of the same, the authorities searched the premises should return the search warrant to the officer who ordered the search, with a comprehensive account on the details of the search.
The issuing authority holds the responsibility of maintaining the register of records of the search warrant.

Access of a CGST/SGST Officer

The Act provides for verification by an audit party of CGST/SGST or C&AG, or a cost accountant, or a charted accountant nominated under Section 66 of CGST or SGST Act, without a search warrant, for the purpose of audit, scrutiny, verification, or checks, in any business premises, in order to safeguard the interest of revenue.

GST Registration

GST LUT Form