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ANALYSIS OF
ANALYSIS OF
POWER OF
POWER OF
SEARCH AND Adv. (CA. ) J.K. Mittal
SEARCH AND
SEIZURES
SEIZURES
UNDER GST
UNDER GST
Every law has power of search and seizures, as earlier Central Excise Act, 1944/ Finance Act,
taxation laws also have such powers, both in direct 1994 and now GST laws, the power of search and
taxes and indirect taxes. Whereas under income seizures are exercised in routine manners without
tax, search and seizures are generally conducted even following due process of law, this has been
only on credible and authenticating information, recognized by the Board (Central Board of Indirect
hence there appears to be less complaints about Taxes and Customs (CBIC), as evident from the
the power exercise under section 132 of the facts that the Ministry of Finance in the
Income Tax Act. But, in GST, power of search has Instructions No. 01/2020-21. [GST-investigation],
appeared to become a tool of harassment for dated 02.02.2021 on the subject “Instructions/
taxpayers as searches are carried out in routine Guidelines regarding procedure to be followed
manner. Many times, investigations are carried out during search operation”, have stated that
in one jurisdiction, to ascertain some facts, officer “Specific instances have come to the notice of the
of said jurisdiction send internal communication to Board and the Central Vigilance Commission
officers in other jurisdictions, however, on the wherein proper procedures have apparently not
basis of such communication, other jurisdictions been followed during search proceedings and/or
also assume that they have power and should start the Punchnamas/statements have not been
independent investigation and also carry out recorded as per extant guidelines and
search, which is fraught with danger of being instructions.” In the matter of R.J. Trading Co. V
challenged as illegal exercise of power without Commissioner of CGST, Delhi North reported in
jurisdiction and without authority of law. 2021 (55) G.S.T.L. 277 (Del.), the search and
Board admitted that proper procedures have seizure conducted by CGST Delhi North
Commissionerate was declared unlawful by
apparently not been followed during search
proceedings: Whereas under indirect taxes such observing that “12….The request of Joint
You never really learn much from hearing yourself speak. 20
