Section 67 – Inspection, Search and Seizure
Section 67 of CGST Act, 2017 – Inspection, Search and Seizure
Updated on: February 2026 (as applicable till date)
Prepared by: Yours Tax Consultant
1. Purpose of Section 67
Section 67 empowers GST authorities to conduct inspection, search and seizure to detect tax evasion and protect government revenue.
This provision grants coercive powers and therefore must be exercised strictly in accordance with law.
2. Statutory Provision – Section 67
Section 67(1):
Where the proper officer,
not below the rank of Joint Commissioner,
has reasons to believe that:
- A taxable person has suppressed transactions, or
- Has suppressed stock, or
- Has claimed excess ITC, or
- Has contravened provisions to evade tax
he may authorise inspection of:
- Any place of business of the taxable person, or
- Any place of business of any person engaged in transport or warehousing
3. Inspection under Section 67
Inspection means:
- Entry into business premises
- Verification of records and stock
- Checking compliance status
Inspection requires:
- Written authorisation
- Reason to believe recorded in writing
4. Search and Seizure – Section 67(2)
If during inspection, the officer has reasons to believe that:
- Goods liable to confiscation, or
- Documents useful for proceedings
are secreted in any place, he may authorise search and seizure of such goods or documents.
Search and seizure shall be conducted in accordance with the Code of Criminal Procedure, 1973.
5. Power to Seal Premises
The proper officer may:
- Seal the place of business, or
- Break open doors, lockers or almirahs
where access is denied.
However, sealing must be proportionate and legally justified.
6. Provisional Release of Seized Goods
Seized goods may be released:
- On execution of bond, and
- On furnishing security or bank guarantee
Relevant Rule:
7. Retention of Documents and Goods
Documents can be retained:
- Only for so long as necessary
Goods seized must be returned:
- Within 6 months
This period may be extended by another 6 months for sufficient cause.
8. Section 67(12) – Deemed Seizure of Electronic Records
Electronic records may be:
- Accessed
- Copied
- Deemed to be seized
Physical removal is not mandatory.
9. Rights of Taxpayer during Search & Seizure
The taxpayer has the right to:
- Demand authorisation copy
- Presence of independent witnesses
- Prepare panchnama
- Receive list of seized items
Illegal search is challengeable in courts.
10. Judicial Safeguards
Courts have consistently held that:
- “Reason to believe” must exist
- Fishing inquiries are not permitted
- Search power must not be abused
Mechanical authorisations are liable to be quashed.
11. Related Provisions
- Section 64 – Summary assessment
- Section 65 – Audit
- Section 129 – Detention and seizure of goods in transit
- Rule 140 – Provisional release
12. Professional Insight
Section 67 is the most intrusive power under GST. Taxpayers must cooperate without surrendering legal rights. Document everything, avoid oral statements, and seek professional assistance immediately.
Disclaimer: This article is prepared based on the CGST Act, CGST Rules, notifications and prevailing legal position as applicable till date. Inspection, search and seizure actions are subject to strict judicial scrutiny.
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