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

Mehta Logistics runs a godown in Surat. A Joint Commissioner of central tax has reasons to believe that the godown owner is keeping goods which have escaped payment of tax. Which step is correct under the inspection provisions?

A Joint Commissioner, or an officer above that rank, who believes a godown owner holds goods that have escaped tax may authorise another central tax officer in writing to inspect the godown. The rules prescribe FORM GST INS-01 for this. No Magistrate order is needed, and the owner need not be registered.

  1. AThe Joint Commissioner may authorise in writing any other officer of central tax to inspect the godown, and the rules require the authorisation in FORM GST INS-01Correct
  2. BOnly the Commissioner can authorise an inspection, and a Joint Commissioner has no such power
  3. CThe Joint Commissioner must first obtain an order from a Magistrate before any inspection of a godown
  4. DInspection of a godown is allowed only when the godown owner is a registered taxable person

Explanation

Under section 67(1)(b), an officer not below the rank of Joint Commissioner who has reason to believe that a warehouse or godown owner keeps goods that have escaped tax may authorise in writing another officer of central tax to inspect. The rules prescribe FORM GST INS-01 for the authorisation. The 'only Commissioner' option is wrong because the threshold is Joint Commissioner rank. No Magistrate order is needed, and the power covers any owner or operator of a warehouse or godown, whether or not registered.

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