GST Inspection, Search, and Seizure Procedures: Rule 139 Explained

Rule 139 of the Central Goods and Services Tax (CGST) Rules, 2017, outlines the specific procedures and forms required for tax authorities to conduct inspection, search, and seizure operations. This rule operationalises the powers granted under Section 67 of the CGST Act.

The provisions of Rule 139 are detailed below:

1. Authorisation for Inspection or Search

A proper officer, who must not be below the rank of a Joint Commissioner, may issue an authorisation if they have "reasons to believe" that a place of business or any other place needs to be visited for inspection, search, or seizure.

• Form Used: The authorisation is issued in FORM GST INS-01.

• Scope: This authorises a subordinate officer to conduct the inspection, search, or seizure of goods, documents, books, or things liable for confiscation.

2. Order of Seizure

If, during the search, the proper officer or the authorised officer finds goods, documents, books, or things that are liable for seizure under Section 67(2), they must formalise the seizure.

• Form Used: The officer issues an order of seizure in FORM GST INS-02.

3. Entrustment of Custody

The proper officer or authorised officer has the discretion to entrust the seized goods or things to the owner or the custodian for safe upkeep.

• Restriction: Once entrusted, the owner or custodian is strictly prohibited from removing, parting with, or dealing with these goods or things without the previous permission of the officer.

4. Order of Prohibition (Constructive Seizure)

In scenarios where it is not practicable to seize any goods physically (e.g., due to volume or nature), the officer may serve an order on the owner or custodian.

• Form Used: The order is issued in FORM GST INS-03.

• Effect: This order prohibits the owner or custodian from removing, parting with, or otherwise dealing with the goods without previous permission from the officer.

5. Preparation of Inventory

The officer seizing the goods, documents, books, or things is mandated to prepare an inventory.

• Details Required: The inventory must contain the description, quantity or unit, make, mark, or model, where applicable.

• Signature: The officer must get this inventory signed by the person from whom the items are seized.

Summary of Forms under Rule 139

Analogy: Imagine Rule 139 as the "Standard Operating Procedure" for a police search operation:

• INS-01 is the Search Warrant, granting legal permission to enter.

• INS-02 is the Evidence Tag, officially marking items taken into custody.

• INS-03 is like placing a police boot/clamp on a car that cannot be towed away immediately; it remains at the location, but the owner cannot use or move it.

• The Inventory requirement is the Police Report, listing every item collected to ensure accountability.

Powers of GST Officers | GST Audit Procedure | GST ADT-01 | Penalty for Non GST Registration | GST Inspector Power