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

Mehta Logistics runs a godown in Pune. The Joint Commissioner of CGST has reasons to believe that the godown owner is keeping goods which have escaped payment of tax. Which of the following is the correct course of action for the Joint Commissioner under the inspection provisions of the CGST Act?

The Joint Commissioner may authorise in writing another central tax officer to inspect the godown. The law expressly extends inspection to owners or operators of warehouses or godowns keeping goods that have escaped tax. No prior notice or Magistrate permission is needed for inspection.

  1. AHe may authorise in writing any other officer of central tax to inspect the godown, as the owner or operator of a warehouse or godown is coveredCorrect
  2. BHe cannot authorise inspection, because only the places of business of a registered taxable person can be inspected
  3. CHe must first obtain an order of a Magistrate before authorising any inspection of a godown
  4. DHe may authorise inspection only after a show cause notice has been issued to the godown owner

Explanation

Section 67(1)(b) covers a person engaged in transporting goods or an owner or operator of a warehouse, godown or any other place who keeps goods that have escaped tax. On such belief, the proper officer (not below Joint Commissioner) may authorise in writing another central tax officer to inspect. No Magistrate order or prior notice is required, and inspection is not limited to the taxable person's own place of business.

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