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

Officers searching the premises of Rao Steel in Hyderabad seized 40 tonnes of steel coils that are liable to confiscation. The coils were provisionally released on execution of a bond and security. Separately, a proper officer also seized a bulky stock of machines at Rao's yard where physical seizure was impracticable. Which statement is correct?

Seized goods may be released provisionally either on a bond with security as prescribed, or on payment of applicable tax, interest and penalty. Where seizure is impracticable, the officer may serve an order of prohibition in FORM GST INS-03, and the owner cannot deal with the goods without the officer's prior permission.

  1. ASeized goods can be released provisionally on a bond and security as prescribed or on payment of applicable tax, interest and penalty; for impracticable seizure, the officer may serve an order of prohibition (FORM GST INS-03)Correct
  2. BSeized goods can be released provisionally only on full payment of tax, interest and penalty; bond and security are not an option
  3. CFor goods whose seizure is impracticable, the officer must abandon the proceedings against them
  4. DAn order of prohibition under FORM GST INS-03 lets the owner sell the goods freely after informing the officer

Explanation

Section 67(6) allows provisional release on execution of a bond and furnishing of security as prescribed, or on payment of applicable tax, interest and penalty. The proviso to section 67(2) and the rules allow an order of prohibition in FORM GST INS-03 where seizure is not practicable. The owner then cannot remove, part with or deal with the goods without the officer's prior permission, so the sale option is wrong. The bond-only restriction and abandonment options contradict the text.

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