CMA Final · Indirect Tax Laws and Practice · Inspection, Search, Seizure, Arrest and Prosecution

Officers seize 500 cartons of goods from a dealer, Mehta Traders, on 10 March. A notice about the goods is first issued on 20 September of the same year after the proper officer, for sufficient cause, extended the period to the maximum permitted. Separately, the officers had seized and retained books of account that were not relied upon in that notice. Which conclusion is correct?

The notice is in time because the six-month period was properly extended by up to another six months, giving twelve months in total. The books not relied upon in the notice must be returned within thirty days of the notice being issued.

1. AThe goods must be returned because the notice came after six months, and the unrelied books must be returned within thirty days of the notice
2. BThe notice is valid, since the maximum period is twelve months in total with the extension, but the unrelied books must be returned within thirty days of the issue of the noticeCorrect
3. CThe notice is valid, and the books may be retained until prosecution ends even if not relied upon
4. DThe notice is invalid because no extension is allowed once goods are seized