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

Mehta Logistics, a goods transport operator in Pune, is suspected of keeping consignments in its godown that have escaped payment of tax. A Joint Commissioner wants to have the godown inspected by a subordinate officer. Under the CGST Act, what must the Joint Commissioner do?

The Joint Commissioner must record reasons to believe that goods escaping tax are kept at the godown and authorise another central tax officer in writing, in FORM GST INS-01, to inspect it. No Magistrate warrant or prior notice is required.

  1. AAuthorise in writing another officer of central tax to inspect the godown, having reasons to believe that goods which escaped tax are being keptCorrect
  2. BOrally direct any officer to inspect, since written authority is needed only for seizure
  3. CObtain a prior warrant from a Magistrate before authorising any inspection
  4. DWait until a show cause notice is issued, as inspection is possible only after a notice

Explanation

Section 67(1)(b) allows a proper officer not below Joint Commissioner, who has reasons to believe that a transporter or warehouse operator is keeping goods which have escaped tax, to authorise in writing another central tax officer to inspect. The rules prescribe FORM GST INS-01 for this. Oral authority and a Magistrate warrant are not required, and a notice is not a precondition.

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