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CA Final · Indirect Tax Laws · Inspection, Search, Seizure and Arrest

During a search at Anand Electronics, the officer seizes account books and registers on 5 May. Notice under the Act is issued on 20 May, relying on only the sales register and not on the purchase ledgers and other seized documents. Which statement is correct about the documents not relied upon?

Documents and books not relied upon for the notice must be returned within thirty days of the issue of the notice. With notice issued on 20 May, the deadline is 19 June. The period runs from the notice, not from the seizure.

  1. AThey must be returned within thirty days of the issue of notice, that is by 19 JuneCorrect
  2. BThey may be retained until the proceedings finally end, whatever the notice relied upon
  3. CThey must be returned within thirty days of the seizure, that is by 4 June
  4. DThey must be returned within six months of the notice

Explanation

Section 67(3) says documents, books or things not relied upon for the notice must be returned within a period not exceeding thirty days of the issue of the notice. Notice was issued on 20 May, so the thirty days end on 19 June. Counting from seizure, as in the 4 June option, uses the wrong starting point. Retention until proceedings end applies only to the documents that are relied upon and necessary.

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