The Tax Publishers

GST--Search & Seizure

Demand of Bank Guarantee for Release of Goods, Where Assessee Made Payment of Tax, Interest and Penalty and Furnished a Bond

P. Narayanan

The learned author seeks to analyse the provisions of section 67(6) relating to release of goods so as to arrive at the conclusion that the proper officer can demand bank guarantee, where assessee made payment of tax, interest and penalty and furnished a bond. The related issue is being discussed in the light of a recent High Court decision in the case of AB Trader v. State of Gujarat, decided on 24-12-2021.

1. Introduction

Section 67 of the Central Goods and Services Tax Act, 2017 (in short "the CGST Act") deals with power of inspection, search and seizure. As per sub-section (1) of section 67 of the CGST Act, where the proper officer, not below the rank of Joint Commissioner, has reasons to believe that --

(a) a taxable person has suppressed any transaction relating to supply of goods or services or both or the stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act; or

(b) any person engaged in the business of transporting goods or an owner or operator of a warehouse or a godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under this Act,

he may authorise in writing any other officer of central tax to inspect any places of business of the taxable person or the persons engaged in the business of transporting goods or the owner or the operator of warehouse or godown or any other place.