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

Mehta Logistics, a goods transport agency in Surat, keeps its consignment records in a way that the Joint Commissioner believes is likely to cause evasion of tax. The Joint Commissioner wants to have its godown inspected. Under the CGST Act, 2017, what is the correct course of action?

The Joint Commissioner may authorise in writing another central tax officer to inspect the transporter's places of business. The Act expressly covers transporters and warehouse operators whose accounts or goods are kept so as to cause evasion, and it does not need a court warrant or any prior notice.

  1. AHe may authorise in writing any other officer of central tax to inspect the places of business of the transporterCorrect
  2. BHe may authorise inspection only after a court issues a search warrant
  3. CHe may inspect only the business premises of a registered supplier and not those of a transporter
  4. DHe may authorise an officer to inspect only after a show cause notice has been issued to the transporter

Explanation

Section 67(1)(b) covers a person engaged in transporting goods, or an owner or operator of a warehouse, who has kept accounts or goods in a manner likely to cause evasion of tax. In that case the proper officer, not below the rank of Joint Commissioner, may authorise in writing another officer of central tax to inspect the places of business. No court warrant or prior notice is required. Hence the other options are wrong.

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