Ques: Section 67(11) -Where the proper officer has reasons to believe that any person has evaded or is attempting to evade the payment of any tax, he may, for reasons to be recorded in writing, seize the accounts, registers or documents of such person produced before him and shall grant a receipt for the same, and shall retain the same for so long as may be necessary in connection with any proceedings under this Act or the rules made thereunder for prosecution.

Where above apply and what is difference in section 67(2) seize and section 67(11) seize. Pls give practical example

Ans:

Under Section 67(11) of the CGST Act, 2017, the proper officer is empowered to seize accounts, registers, or documents of a person if there are reasons to believe that the person has evaded or is attempting to evade tax. This power can be exercised for reasons recorded in writing, and a receipt must be granted to the person whose documents are seized. The seized records are retained only for so long as necessary for any proceedings under the Act, including prosecution. Practically, this provision is invoked in cases of suspected tax evasion, such as a taxpayer underreporting sales or claiming ineligible input tax credit (ITC). For example, if during an audit or investigation, the officer finds discrepancies suggesting deliberate concealment of taxable supplies, the officer may seize invoices, books of accounts, or digital records under Section 67(11).

The difference between Section 67(2) and Section 67(11) lies in the scope and intent of seizure. Section 67(2) deals with seizure during inspection of premises in relation to determination of tax liability, generally as part of a routine or scheduled inspection. It allows the officer to seize goods, documents, or accounts as a precautionary or investigative measure in connection with the ongoing proceedings to determine tax liability. In contrast, Section 67(11) specifically targets situations where there is reason to believe evasion or attempted evasion, often indicating deliberate intent, and the seizure may also be used to initiate prosecution proceedings.

Practical Example:

• Section 67(2) Seizure: During a scheduled GST inspection at a factory, the officer notices missing invoices for certain stock and seizes them temporarily to determine the correct tax liability.
• Section 67(11) Seizure: During an investigation, the officer uncovers evidence that a taxpayer is intentionally underreporting sales to evade GST. The officer seizes the complete accounting records and digital data to preserve evidence for potential prosecution, issuing a receipt and retaining records until the investigation is concluded.

This distinction is critical as Section 67(11) seizures are linked to suspected evasion and potential criminal proceedings, whereas Section 67(2) seizures are typically part of tax determination or compliance verification