Ques: WE AREDOING BUSINESS IN GROUND NUT SEEDS. THE ISSUED NOTICE INS-1 UNDER SECTION 67 OF THE ACT AND AFTER INSPECTION SOME STOCK VARIATION WAS NOTICED AND ESTIMATED THE VALUE 10 LAKHS . THEY ISSUED A NOTICE TO PRODUCE BOOKS OF ACCOUNTS IT RETURNS FOR 4 YEARS AND ASKED THE LEDGER EXTRACTS 180 DAYS PAYMENTS ETC . WE REPLIED THE DEPT SIR INSPECTION WAS CONDUCTED UNDER SECTION 67 OF THE ACT AND WE READY TO PAY GST AND PENALTY IF IT IS LIABLE AND WE ARE NOT IN A POSITION TO SUBMIT OTHER INFORMATION AS REQUESTED IN THE NOTICE AS IT IS NOT A NOTICE ISSUED UNDER SECTION 65 AUDIT. THE DEPARTMENT ISSUED AGAIN A NOTICE TO SUBMIT ALL THE PARTICUCLARS AS REQESTED. LET ME KNOW WHETHER THEY ARE AUTHORISED TOASK ALL THE PARTICULARS UNDER SECTION 67 PL INFORM WHAT ARE THE POWERS OF THE DEPARTMENT UNDER SECTION 67 PL INFORM ANY CASE LAW ON THIS ISSUE.
Ans:
Section 67 – Power of inspection, search and seizure
The section empowers the proper officer (Joint/Assistant Commissioner or above) to:
- Inspect any place of business, warehouse, godown, or transporter’s premises if he has “reasons to believe” that:
- (a) A taxable person has suppressed transactions, or
- (b) Stock of goods liable to tax has been kept to evade tax, or
- (c) A person engaged in transport/warehousing is keeping goods that escaped tax, or
- (d) A person is keeping accounts/documents that may be useful for proceedings.
If such belief exists, he can authorise an officer to inspect, and if necessary, seize goods, documents, books or things.
Key Powers under Section 67
| Power | Reference | Remarks |
| Inspection | Sec 67(1) | Limited to verification of goods, documents, records found at the premises. |
| Search & Seizure | Sec 67(2) | If after inspection, officer forms a belief that goods/documents useful for proceedings are secreted, he may seize them. |
| Access to electronic records | Sec 67(3) | Officer can access computer systems and require assistance. |
| Retention & release | Sec 67(7)-(9) | Must prepare inventory; release when not required; cannot keep beyond statutory limits. |
| Provisional release | Sec 67(6) | Goods can be released provisionally upon execution of bond/security. |
- Limits on Power — What They Cannot Do Under Section 67
- Section 67 authorises inspection, search and seizure, not audit or scrutiny of past returns.
- Demanding complete books of accounts for four years, ledger extracts for 180 days, etc., is outside the immediate scope of inspection, unless they are directly relevant to the reason recorded for inspection (for example, verifying the ₹10 lakh stock variation).
