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

Under a search at the premises of Kiran Traders, the authorised officer seizes goods valued at Rs 8 lakh on 10 March 2026. No notice about the seized goods has been issued so far. The proper officer has not extended any period. By which date must the goods be returned if no notice is given, and what is the maximum outer limit if the proper officer extends the period for sufficient cause?

The goods must be returned if no notice is issued within six months of seizure, that is by 10 September 2026. For sufficient cause the proper officer may extend this by up to a further six months, so the maximum outer limit is 10 March 2027.

  1. A10 September 2026 for the basic period; 10 March 2027 at most after extensionCorrect
  2. B10 June 2026 for the basic period; 10 December 2026 at most after extension
  3. C10 September 2026 for the basic period; 10 September 2027 at most after extension
  4. D10 March 2027 for the basic period; 10 September 2027 at most after extension

Explanation

Section 67(7) requires goods seized under section 67(2) to be returned if no notice is given within six months of seizure. Six months from 10 March 2026 is 10 September 2026. The proper officer may extend this for sufficient cause by up to six more months, so the outer limit is 10 March 2027. Options with three months or a twelve-month base period misstate the statutory periods.

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