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

Mehta Logistics runs a godown in Surat. The Joint Commissioner of CGST has reasons to believe that the godown is keeping goods which have escaped payment of tax. Under section 67(1), what may the Joint Commissioner do?

The Joint Commissioner may authorise in writing another officer of central tax to inspect the godown. Section 67(1)(b) allows inspection where a warehouse owner is believed to be keeping goods that escaped tax. It does not itself permit arrest, confiscation without notice or cancellation of registration.

  1. AAuthorise in writing any other officer of central tax to inspect the godownCorrect
  2. BDirectly arrest the owner of the godown without any further inquiry
  3. COrder permanent confiscation of the goods without issuing a notice
  4. DCancel the registration of Mehta Logistics with immediate effect

Explanation

Section 67(1)(b) covers persons who keep goods that have escaped payment of tax, or who keep accounts or goods in a way likely to cause evasion. On such a belief, the proper officer, not below the rank of Joint Commissioner, may authorise in writing another central tax officer to inspect the place. Arrest, confiscation without notice and cancellation are not the consequence under this provision.

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