Indirect Tax Laws · Inspection, Search, Seizure and Arrest

Inspection, Search and Seizure under Section 67 of the CGST Act

Updated 5 October 2026

Section 67 lets a GST officer inspect places of business, search premises and seize goods, documents, books or things. An officer not below the rank of Joint Commissioner must have reason to believe and authorise another officer of central tax in writing. To solve a question, test the authority, the ground, the place, the thing seized and the procedure.

Understand Inspection, Search and Seizure under Section 67

GST depends on self-assessment. The department needs a way to check whether a taxpayer is being honest. Section 67 gives that power. It lets officers look at premises, search them and take away goods, documents, books or things that point to tax evasion.

The power is serious, so it comes with safeguards. It starts with a senior officer. The proper officer must be not below the rank of Joint Commissioner (so Joint Commissioner, Additional Commissioner and higher ranks all qualify). That officer must have reason to believe, and he then authorises in writing an officer of central tax to inspect, or to search and seize. The belief must rest on actual grounds, not on suspicion or a hunch.

The grounds differ for inspection and for search and seizure.

Inspection (s.67(1)). The reason to believe is one of these:

A taxable person has suppressed any transaction of supply or stock of goods in hand, has claimed input tax credit in excess of entitlement, or has contravened the Act or rules to evade tax.
Any person engaged in the business of transporting goods, or an owner or operator of a warehouse or godown, has kept goods that have escaped payment of tax, or has kept accounts or goods in a manner likely to cause evasion.

On such a belief, the authorised officer may inspect any place of business of the taxable person, the transporter, or the warehouse or godown owner or operator.

Search and seizure (s.67(2)). This rests on a separate reason to believe: that goods liable to confiscation under the Act (for example under section 130), or documents, books or things useful for or relevant to any proceedings under the Act, are secreted in any place. Seizure needs the reason to believe of an officer not below the rank of Joint Commissioner and his written authorisation to the officer who acts. It can follow an inspection or arise otherwise. The authorised officer may then search the place and seize those goods, documents, books or things.

Safeguards and time limits.

Documents, books or things seized must not be retained beyond the period necessary for their examination and for any inquiry or proceedings under the Act. The person from whom they were seized may make copies of them at the place and time prescribed, in the presence of an authorised officer (s.67(3)).
Where seized goods are perishable or hazardous, they are released on application on payment of the market price of the goods or the tax, interest and penalty that may be payable, whichever is less. Otherwise they may be disposed of in the prescribed manner (s.67(5)).
If no notice under section 73 or 74 is issued within six months of the seizure of goods, the seized goods must be returned. This limit applies to goods, not documents. The proper officer can extend it by up to a further six months for sufficient cause (s.67(7)).
Seized goods can be released on a bond and security, as provided in the rules.

Search and seizure follow the provisions of the Code of Criminal Procedure, 1973 relating to search and seizure, as applicable.

Key rules to remember

Who authorises: Reason to believe held by an officer not below the rank of Joint Commissioner, who authorises an officer of central tax in writing to inspect, or to search and seize; Additional Commissioner and higher ranks are covered by 'not below'. Check the rank, the reason to believe and the written authorisation first in a case question.
Condition for inspection (s.67(1)(a)): Reason to believe that a taxable person has suppressed supplies or stock, claimed excess ITC, or contravened the Act or rules to evade tax; Inspection of the place of business is allowed on this ground. The belief must be based on material.
Inspection of other persons (s.67(1)(b)): Reason to believe that a transporter or warehouse/godown owner or operator keeps goods that have escaped tax, or keeps accounts or goods so as to cause evasion; The power extends beyond the taxable person to those holding goods or records.
Search and seizure ground (s.67(2)): Reason to believe that goods liable to confiscation under the Act (for example under section 130) or documents, books or things useful for or relevant to proceedings are secreted in any place; This is a separate ground from inspection. Seizure needs the Joint Commissioner's reason to believe and written authorisation. The search can be of any place, not only business premises.
What can be seized: Goods liable to confiscation, and documents, books or things useful for or relevant to proceedings; Seizure is limited to these. General removal of unrelated material is not covered.
Time limit on seized goods (s.67(7)): No notice under s.73 or s.74 within 6 months of seizure of goods → goods returned; the proper officer can extend by up to 6 months for sufficient cause; A key examinable point. The limit applies to goods, not documents. Seized documents, books or things must not be retained beyond the period necessary for their examination and for any inquiry or proceedings under the Act (s.67(3)).
Procedure: Search and seizure follow the Code of Criminal Procedure, 1973 provisions, as applicable; Mention this in the answer. It links to witnesses, a list of seized items and the like.

How to solve Inspection, Search and Seizure under Section 67 questions

Use this order for any Section 67 question. Write each step as provision, facts, conclusion.

1Identify the action taken: inspection, search or seizure. Inspection and search-seizure have different grounds.
2Check the authority. Was the action based on the reason to believe of an officer not below the rank of Joint Commissioner, who authorised the officer who acted in writing?
3Check the ground. For inspection: suppressed supplies or stock, excess ITC, contravention to evade tax, or a transporter or warehouse keeping goods that escaped tax or accounts so as to cause evasion. For search and seizure: goods liable to confiscation or relevant documents, books or things secreted in any place.
4Identify the place and the person: a taxable person's business place, a transporter, a warehouse or godown, or another place where things are secreted.
5Identify what was taken. Goods liable to confiscation, or documents, books or things useful for proceedings, qualify. Other things do not.
6Check the procedure and safeguards: Code of Criminal Procedure provisions, retention of documents only as long as necessary, copies, release on bond, and the six-month limit for a notice under section 73 or 74 after seizure of goods.
7State the conclusion clearly: valid or invalid, and what the taxpayer or the department can do next.

Quickest way: Authority, Belief, Item

When to use it: Use it for short MCQs and for the first line of a descriptive answer when time is short.

A: Did an officer not below the rank of Joint Commissioner, with reason to believe, give a written authorisation to the officer who acted? If no, the action is open to challenge.
B: Is there a reason to believe on the right ground (inspection ground or the search-and-seizure ground)? If no, the action fails.
I: Is the item goods liable to confiscation, or documents, books or things relevant to proceedings? If yes, seizure is valid.
Then add one line on procedure, the six-month notice limit for seized goods and release of goods, and close with the conclusion.

Common mistakes in Inspection, Search and Seizure under Section 67

Saying any GST officer can order a search.
Students remember the word proper officer and forget the rank and written authorisation condition.
Fix: Always write that an officer not below the rank of Joint Commissioner must have reason to believe and authorise another officer of central tax in writing to inspect, or to search and seize.
Treating suspicion as reason to believe.
The two sound similar in everyday speech.
Fix: State that the belief must be based on material and a ground given in the section, not on a mere doubt.
Using one ground for inspection, search and seizure alike.
Students blend the three actions into one power.
Fix: Keep inspection grounds (s.67(1)) apart from the search-and-seizure ground (s.67(2): goods liable to confiscation or relevant documents secreted in any place).
Limiting inspection to the taxable person's premises.
Students read the section as being about the registered person only.
Fix: Remember that transporters and owners or operators of warehouses or godowns can be inspected, and that search can be of any place.
Saying all goods and records at the premises can be seized.
Seizure is thought of as a blanket power.
Fix: Only goods liable to confiscation and documents, books or things useful for proceedings can be seized.
Skipping the procedure and time limits in the answer.
Students stop once they have stated the power.
Fix: Add the Code of Criminal Procedure reference, copies and limited retention of documents, release on bond, and the return of goods if no notice under section 73 or 74 is issued within six months of seizure (extendable by up to six months).

Worked examples

Example 1

A GST officer of the rank of Superintendent is informed that Alpha Traders has not recorded some sales. Without any written authorisation, he enters Alpha's godown and takes away its sales register. Alpha says the action is invalid. Examine.

Show the solution

Provision: inspection, search and seizure under Section 67 need the reason to believe of an officer not below the rank of Joint Commissioner, and that officer's written authorisation to the officer who acts.
Facts: the action was taken by a Superintendent with no written authorisation. Suppression of sales is a valid inspection ground in principle, but the authorising step was missed.
The seizure of the sales register also depends on a valid search or inspection. Without authorisation, the base fails.
Conclusion: the action is not in line with Section 67 and Alpha's objection is correct.

Answer: The inspection and seizure are invalid because there was no written authorisation from an officer not below the rank of Joint Commissioner.

Example 2

The Joint Commissioner has credible information that Beta Logistics, which transports goods and also operates a warehouse, keeps goods on which GST was not paid in that warehouse. He authorises an officer in writing to inspect the warehouse. The officer finds such goods and also some unrelated personal papers of a partner. The Joint Commissioner, believing the goods are liable to confiscation under the Act, authorises their seizure in writing. Which items can be seized?

Show the solution

Provision: under s.67(1), an officer not below the rank of Joint Commissioner may authorise inspection when he has reason to believe that a transporter or warehouse owner or operator keeps goods that have escaped tax.
Facts: the Joint Commissioner authorised in writing and the ground is goods that escaped tax, so the inspection is valid.
Provision: under s.67(2), goods can be seized if an officer not below the rank of Joint Commissioner has reason to believe they are liable to confiscation under the Act (for example under section 130) and authorises the seizure in writing. The test for seizure is liability to confiscation, not unpaid tax alone.
Facts and conclusion: the Joint Commissioner holds that belief for the unpaid-tax goods found in the warehouse and has authorised the seizure in writing, so the goods can be seized.
Personal papers can be seized only if they are documents, books or things useful for or relevant to proceedings under the Act. The partner's unrelated personal papers are not, so they cannot be seized.
Procedure: the seizure follows the Code of Criminal Procedure provisions, and the goods can be sought for release on a bond. They must be returned if no notice under section 73 or 74 is issued within six months of seizure; the proper officer can extend this by up to six months for sufficient cause. This limit applies to goods, not documents.

Answer: The goods that escaped tax can be seized, as the Joint Commissioner believes they are liable to confiscation under the Act and has authorised the seizure in writing. The partner's unrelated personal papers cannot be seized, as they are not useful for or relevant to the proceedings.

Exam tips

Open every answer by naming the rank of the officer who holds the reason to believe, and the written authorisation he gave. Examiners look for these first.
In case MCQs, check the rank of the officer and the authorisation before anything else. A lower-rank officer acting without authorisation is a common trap.
Keep the answer in provision, facts, conclusion form and use the facts given in the case by name.
Distinguish clearly between inspection, search and seizure. Inspection grounds and the search-and-seizure ground are different.
Remember the six-month limit for a notice under section 73 or 74 after seizure of goods, and the limit on retaining documents. Mention them when the case says goods or papers are being held.

Practice questions from Inspection, Search, Seizure and Arrest

Inspection, Search and Seizure under Section 67: frequently asked questions

Who can authorise inspection, search and seizure under Section 67?

An officer not below the rank of Joint Commissioner, who has reason to believe on the relevant ground, authorises another officer of central tax in writing to inspect, or to search and seize. Additional Commissioners and higher ranks also fall within 'not below'.

What is reason to believe in Section 67?

It is a belief based on actual material. For inspection it could be suppressed supplies, excess ITC claim or goods that have escaped tax. For search and seizure it is that goods liable to confiscation or relevant documents are secreted. A bare suspicion is not enough.

What can be seized under Section 67?

Goods that are liable to confiscation, and documents, books or things useful for or relevant to proceedings under the Act. Perishable or hazardous goods are released on application on payment of the market price or the tax, interest and penalty payable, whichever is less. Otherwise they may be disposed of in the prescribed manner.

What happens if no notice is issued after goods are seized?

If no notice under section 73 or 74 is issued within six months of the seizure of goods, the goods must be returned to the person from whom they were seized. The proper officer can extend this period by up to a further six months for sufficient cause. The limit applies to goods, not documents.

Can premises of persons other than the taxable person be inspected?

Yes. Transporters and owners or operators of warehouses or godowns can be inspected on a reason to believe that goods have escaped tax or accounts are kept to cause evasion.