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

Under the CGST Act, 2017, when goods are seized after a search and no notice in respect of them is given within six months of the seizure, what is the position?

The goods must be returned to the person from whom they were seized if no notice is issued within six months of seizure. The proper officer can extend this period for sufficient cause by up to another six months, but there is no automatic confiscation or indefinite retention.

  1. AThe goods must be returned to the person from whose possession they were seized, unless the proper officer extends the period for sufficient causeCorrect
  2. BThe goods stand automatically confiscated to the Government
  3. CThe goods must be sold by auction and the proceeds deposited with the Government
  4. DThe goods continue to be held until the investigation is completed, with no time limit

Explanation

Section 67(7) says that if no notice is given within six months of seizure, the goods are returned to the person from whose possession they were seized. The proper officer may extend the period for sufficient cause by up to a further six months. Automatic confiscation or indefinite retention is not provided.

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