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CMA Final · Indirect Tax Laws and Practice · Inspection, Search, Seizure, Arrest and Prosecution

Aarav Traders' stock of goods is seized under Section 67(2) of the CGST Act. Which of the following is a correct statement about release and custody of the seized goods under the Act and the Rules?

Seized goods may be released provisionally on a bond and security as prescribed, or on payment of applicable tax, interest and penalty. The officer may also entrust the owner with safe custody, but the owner cannot remove or deal with them without the officer's prior permission.

  1. ASeized goods can never be released before adjudication
  2. BThe owner can obtain provisional release only by paying the full penalty, and a bond with security is not permitted
  3. CThe goods may be released provisionally on execution of a bond and furnishing of security as prescribed, or on payment of applicable tax, interest and penalty; the officer may also entrust custody to the owner, who must not deal with them without permissionCorrect
  4. DCustody of seized goods must always be handed to the police, and the owner has no role

Explanation

Section 67(6) allows provisional release on a bond and security, or on payment of tax, interest and penalty. The Rules allow the officer to entrust the owner or custodian with safe upkeep, and that person must not remove or deal with the goods without the officer's previous permission. The other options contradict these provisions.

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