Chapter XIV INSPECTION, SEARCH, SEIZURE AND ARREST

(I) Toe Government may require the person i;n charge of a Inspection of goods i conveyance carrying any consignment of goods of value movanent exceeding such amount as may be specified to . carry with him such documents and such devices as may be prescribed. (2) The details ofdocuments required to be carried under sub-section ( I) shall be validated in such manner as may be prescribed. (3) Where any conveyance referred to in sub-section (1) is intercepted by the proper officer. at any place. he may require the person in charge of the said conveyance. to ? thedocuments prescribed under the said sub- . section and devices for verification, and the said person shall be liable to produce the documents and devices and also a.How the inspection of goods. 2afl974 85

( l) Where •• the, Commissionei: has · reasons to believe Powa- to arrest • . t:h? ?y pe,son ? CQQnitteq, any offence specified ,:lll clause [a) or clause (b) or clause (c) or clause (d) of ,. sμb--semol\,.(l) of section J32which is punishable under cla??i) or O,i) of.sab-section (l}or,sub-secticm (2) of the said section. he may,. by order, authorise any officer of S?1b\X to arrest sucbperson e; ·• (2) Where a person is arrested under sub-section (1) for an offence specified under sub-section (5) of $Cctio11132. the officer authorised to arrest a person shall inform s? person of the grounds· of an-est· and produce· him before a Magistrate within twenty four hours. (3) :Su'6ject1'to) the provisions of the Code of Criminal Procedure.1973,- (a) where a person ls.arrested under sub-section (1) for any offence specified ?9er sub-section { 4) of section 132, heshall be adoiiired to bail or in default of be% ?f\!arded ? the c?!=>41of the Magistrat.e; ,. (b) 'in the case of a non-toglll7.ablt ·and bailable offenct. the Deputy Commissioner or the.Assistant Commissionersruil}. for.the purpose of releasing an arrested person on baihw-otherwise. have the same po??s.J-Od be subj? totlle .. ? pi:ovisions as an o???r .. ?-c.l}9e of ?.policq station ..... • tafl908

(1) The prope,;,officer under.this.A? shall have power to summon any person whose1 attendance he considers necessary either to give evidence or to produce a do?tor any other thing in?any inquiry in the same manner;;u provided in the·caseofacivil court under the provisionsoftht-Cbdeof' €i'Yit?edure.

(1) Any officer under this Act authorised by the proper Access to business officer not below the rank of Joint Commissioner shall . premises. have access to any place of business of a registered person to inspect books of account, documents, computers. · computer programs, computer software whether installed in a computer or otherwise and such other things as he may require and which may be available at such place, for the purposes of carrying out any audit, scrutiny, verification and checks as may be· necessary to safeguard the interest of revenue.

of2013 43ofl961 (2) Every person in charge of place .referred;to in sub- section ( 1) shall, on demands mab available to the officer authorised under sub-section fi) or the i audit party deputed by the proper officer or atost·accountant or chartered accoua&ant nominated under seffion 66-- (i) such records as prepared or maintained by the registered person and declared to the proper officer in such manner as •Y be prescribed; (ii) trial balance or its equivalent; (iii) statements ·of annual financial accounts, duly audited, wherever required; (iv) cost audit report, if any, under secti°°' of the Companies Act, 2013; ' · · (v) the income-tax audit report, if any, under section 44AB of the Income-tax Act.1961; and (vi) any other relew.n? record, for the scrutiny by the officer or audit party or the chartered accountant or cost accountant within a peri? ,not exceeding fifteen working days from tl,ie day when such demand is made, or sucli further: period as may be allowed by the said officer or the audit party or the chartered accountant or,cost accountant. 72. ( 1) All ·officers of· Police, •Railways,• CUst? .. and those Officers to assist pn engaged in the· collection of bind tevenll'.e, including oflic:ers. village officers, and officers of central tax and officers of the Union tenitory. tax? assist the proper officers in the implementation, of'this Act. 'IheGovernment: m?y s.. by. notification, .: empower and require any other class of o#.ficers. to. assist the propel'. officers in. the implementation of this Act w'h?n called upon to do so by the Commissioner.

CHAPTER XV DEMANDS AND RECOVERY 73. (1) Where it appears to the pr911er officer that any tax has not· been paid or short paid or erroneously refunded, or where input tax credit h? ?h'wrongly availed or utilised for any reason, othertli,ait]he Jeas<>n of fraud or apy wilful-111isstatement or s'1:ppression of facts to evade tax, h.e shall serve notice <>n ?e ?on. charg?le with tax whichhas not been so paid or whl,ch hasbeen so short paid or to whom the refund has erroneously . been made, or who has wrongly availes} or utilis,ed input tax credit, requiring him to show cau?e wl,iy he should not pay'the.amount specified in the notice along with interest payable thereonunder section and a penalty leviable underthe provisions ofthis Act or the rules made thereunder. (2) The proper officer shall issue the notice under. sub- section (1) at least three months prior to the time limit specified in sub-section (10) for issuance oforder. (3) Where a notice hasbeenissued for any period under sub-section (1 ), the proper officer may serve a statement, containing the detailsof tax not paid or. short paid or erroneously refunded or input tax Q'e(tit wrongly ivailed or utilised forsuch periods other thanthose covered under sub-section (1), on the person chargeable with tax. ( 4) The service -of such statement shallbe deemed to be · service of notice on such ·person under?on (l), subject to the condition that the grounds relied upon for such tax periods otherthan· th? coveredundetsub- section (1) are the same as are mentioned in the earlier notice. (5) The person chargeable with tax may, before service of notice under sub-section (1) or, as the case may be, the statement under sub-section (3) pay the amount of tax along with interest payable thereonunder section50 on the basis ofhis own ascertainment of such tax or the tax as ascertained by the proper officer andinform the proper officer in writing of such payment. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other thanfraud or any wilful misstatement or suppression of facts.

(6) The proper officer, on receipt of such information, shall not serve any notice under sub-section ( 1) or, as the case may be, the statement under sub-section (3), in respect ofthe tax so paid or any penalty payable, under the . provtsions of μtis J\ct or the rules made there?der. (7) Where the J?f? officer is of the, 9pmion that the amount paid 'Wder sub-section (5) falls short of the amount actually .payable. he shall proceed to issue the notice .as provided for in sub-section (1) in respect of such· amount ·.which falls short of the amount actually payable. · . (8) Where. any person chargeable with tax. under sub- section (l'f or sub-section (3) pays the said tu along with interest payable under section within thirty days of issue of show cause notice, no penalty shall be payable and all proceedings in respect of the said.notice shall be deemed to be concluded. (9) The proper officer shall, after considering the · representation. if any. made by person ?geable with tax. determine the amount of tax. in? and a penalty equivalent toten per cent of tax or ten thousand rupees. whichever is higher, due from such person and .issue an order. · ( O) · Toe proper officer shall isSue the-0rder under sub-section (9),Mthin three years from the due date for filing of annuat .ttturn for the financial year to· which the tax not paid9r short ppd or input. tax credit wrongly availed or utilised relates to. or within three years from the date of erroneous refund. (11) Notwithstanding anything .contamed in sub-section (6) or.sub-section (8), penalty under sub;-;section (9) shall be payable where an.y amount of self-assessed tax or any amount,..collected ?}? has not been paid within a period of thirty days from the due date of payment of such tax.

74. (1) Where. it appears to the prpper officer ?taIJJ.tax has llQt ? paid or short paid or erroneously. refunded Of! ?here input tax crajit has been wrpl)gly availed or utilised by reuon ?f fraud, or any willful-mis.statement or suppression of facts to ?e tax, he shag sei:y,e notice on the person chargeable,with tax which.? 11ot been so paid or which has been so short paid or to whom the refund has erroneously been made, or who. has wrongly availed or. utilised input tax· credit, ?utring bim to show cause ?hy he should notpay the a11.1buntspecified in the notice ?ong with interest payablith?tto,? under section and a penalty equivalent to the tat specified in the notice. ·, . · (2) 'Ihe proper officer. shall issue the notice under sub- section (1) at least .six months prior to the time limit specified in sub-section. (10) for issuance of otder. (3) Where a. notice has been issuedfor any period under sub-section (1 ), the proper officer may serve a statement, containing the cletails of taxnot paid or short paid or erroneously refunded otinput tax aedit wrcmgly)vailed or utilised for such periods other than th<>,e.rfJ()Vered under sub-section (0, on the person ch? with tax. (4) The service of statement under sub-section (3) shall be deemed to be service of notice under sul>-section (1) of section 73, subject to .the condition that thegrounds relied upon in the said statement, excepfthe ground . <i ? or any willful-misstatement or ?n of .· tacts to evade ?for periods .other than thQ$e .. ? under sub-section (1) are the .same. as'are mentioned in the earlier notice: ' . . ' .. < (5) The person chargeable with tax may, before service of notice under sub-section (1), pay the amount of tax along with ?fftSI payable under section and a. penalty equivalent to fifteen pa cent of suclftax on the basisof his own ascertainment of such tax or the tax as ascertained by the proper.officer and inform the proper offi.cel' ? writing of sus)l payment '( { 6) J,\le proper office,;. on r?pt of su? informatj.on, shall i}lot serve any nc>Jice un? .sub-?on (1), iJJ:. respect of the tax so ?d or any penalty payable.? the provisions of this Act or the rules made ther?\W?r. Dettrmination of tu not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful-nilsstatement or suppression of facts.

(7) Where the proper officer is of the opu,uon thatthe amount paid under sub-section (5) falls short of the arliount actually payable. he· shall proceed.to issue the 11&.ce aS provided for in· sub-section (1) bl·;respect of siich iltnount which1alJsshort· of the ;IDlO\lllt actually payable. ,. ·• d, .. ?:· -r ., (8) 'Wh??t anypmon chargeable with. tax wider sub- ??P (J)pays the said.? along with in? payable ·un? ?on SO.and a penalty equivalent to twenty five · ?i '?nt of such tax wi? thirty ? of is.me ofthe notice,''all proceedings in respect of tlle said qotice shall be deemedto be concluded. . . ?i!'r (9)\ The proper officer shall. .. after considering the ' · representation, if any. made,? rthe. per&Ol1 chargeable with tax, determine the amount of· tax, interest and pepalty due fromsuch person and issue an order. (1 O)r 1he'Jm>per officer shall issoethe order under sub-section ·· · ;(9) within· a period of five years from the due .date for · :filmg <,f anaual return forthe financial year to which the tit.·aot paid or short paid or input tax credit wrongly availed or utilised relates to or within five years from the date of erroneous mund. Cpl ·\VJiF aD)'.person 5dved widi an order,'tssued under h,. ,,,t: .???on (9) pays !}le tax along with iJlterest payable . ·· · tlier.?.911del" section and a penalty equivalent to fifty per;cent of S\!ch tax within thirty days of e<>mmtmication of the .or.4er., 'all proceedings·uj respect of the said notice · shallbe deemed to be conduded, . Explanation 1.-: For the purpqses of section73 andthis ?on, - (i) . the ?ression .'"all proceedings,. in rqpect of the said flptice'" shall not include proceedings under section 132; (ii) where the notice under the same proceedings is issued to the main person liable to.pay tax·•4nd some other persons, and such proceedings against the main person ha.-e been conduded!ihder section or sedlon 74, t1te Rroceedings agamsfall t1ie perions liable ufpay penalty :'Jmder sections122, 125,129 and130 are deemed to be :e '.d>hcluded. · i ·

Explanation 2.- For the . purposes of this Act, the expression "suppression" shall mean non-declaration of facts. or information which a taxab?person is ttqwred,todeclare in the return, statement, report ot my· other ?fufuished undtr this Actor the rules niade .thereunder, or failure to fwn!sh_? information on being asked for, in writing, by th.e proper officer. 75. (1) ·Wn?t}if ?ce bf notice or ?'(or<ierJS stayed by an ordefof a court or Appellate TribUQ..t, .the period of such stay shall be excluded in computing the period ?pecified in sub-sections (2) and (10) ?f ?on or sub-se¢ons (2) and (IO) of seqion 74, ? :tlje ¢ase may be. . . ; .. ·· • .. ;-,, ,.,, General provisions relating to determination oftax. (2) W]lere any.? Authority or Appellate Tribunal or. court am? tltet, the notice issued. under sub- . section (1) of? 74il not SQStainaWe for the reason tbaluhe charge(oHraud or any wilful mis IDkmeator supp.-ession of facts to evade tax has not been established against the person to whom· the notice was iuued, · the p? officer shall.?.•.tJie tq.? by :$II.Ch person, cleeming as if the. J1Qtice were•iuued undersuJ>.. section (1) of section 73. · (3) Where any order is req? ? l>e issued in J)W'S\lanCe . ()fthe direction .or tlie?peJJ?':Authority ?.r,.?e . 'μibunal or a co?. such order shall be ?uicfWithin two years from .. the .date. ofcommunicatio.q of the said .. direction. · (4), -An' opport\lllity of·beJring shall be granblcl where a requestis received in writing from the ?oon chargeable with tax or penalty, or.where any adverse decision is contemplated against such person. (5) 'Ihe proper officer shall, if,)?cient ? is shown by the person chargeable with tax, gtanttime.to the said person an,4 adjown the hearing for reasons to be recorded in Jri?png: . . Provided that no such adjolitnnient shall be panted for more than three times to a person during the proceedings. · ·(6' The proper officer, in his .oid? shall set out die 'relevant facts and the WIS of his decision. · ';,

(7) The amount of tax, interest and. penalty demanded in · the order shall not be in excess of.the 8.IDO\Jllt specified in the notice,and m, demand .,Mlall_be.con6nned on the grounds otherthan the gro??cifiedJn the notice. (8) Where the Appmate Autborit)! .. or Appellate Tribunal or court modifies the amount of tax determined by the proper offifer,. t.h? ammmt (?f ? ??- -?ty shall stand modified accordingly.taking into account the amount of tax so modified. (9) The in?rest on the tax short paid or not ?d shall be payablewhetberornotspedfiedbi the order determining the tax liability. · · (10) 1be ad?diattion proceedings shall be deemed to be concluded, ifthe order is riot isSlled wftbinthree years as provi4ed·for in sub-section (10) of section or within fiw'years as provided for in sub-section (10) of section ,14 •. (11) .An issue on which. rfhe .. Appellate Authority or the ?· '1nbunal or the High' Court 1- given its decision which Is prejudicial to the interest of revenue in some other proceedings and an appeal to the Appellate . Tribunal or the High Court or the SμpJem.e Court api.tiSt such declsic)11 oft.J;,e.Appellate Authority-or the ApptJJate '1ril>unal • or the· High Court is •. ?Fnding. the pen? ? 1,etween tile date. ofthe decision ofthe Appellate' Authortty·andthat o( the Appellate Tribunal or the date ofdeclsi011 ofthe Appellate 'tribunal and that ofthe High Court or the date of the decision of the High Court and _that of the Supreme Coμrt shall be excluded in computing the peri<M.l referre<l to in sub-section (10) of section73 or sub-section(lO) of section where proceedings are h)iijated by .. ?y of issue of a ?w cause notice undersaid sections. . . (12) Notwi?dlng &ri)"tlilng contained in section or section74, where lU1Y • amount of ael(.:assessed tax in accordance·with at return furnished ·under· section remains unpaid. either wholly or partly.· or any amount of interest payable on such tax remains unpaid, the same sbal1 be recpvered under the provisions ofaection • .. {13) Where any penalty is· imposed under section73 or '"'?11?4, no penalty fOT the .same .?,Cl>I' omission shall be imposed on the saJDe person ? any other provision of this Act. ·

76. (1) Notwitqstanding anything J? the contrary contained in any .or?r or direction pf any Appellate Am:hority or Appell .. re Tubunalor p>9{t.Qf in any other provisi<?D$ of this Act or the rules made ther? or. anyotlie, ij.wfor the time being in force, every person who has collected from any other person ? ?owtt"'as'representing the tax under this Act. and has not paid the said amount to the Goveminent. ·shall· fo,;thwith pay the. saidamourit to the Government. irrespective of whether the supplies in respect of which such amount was collected are taxable or not. (2) Where any amount :is required 'to be paid to the Government under sub-section (1), and which has not been so paid, the proper officer may serve on the person liable to pay such amount a notice requiring him to show cause why the said amount as specified in the notice, should not be paid by himrto theGovernmentand why a penalty et}Uivalent to the ahiount·specified in the notice should not be imposed on him under the •provisions of this Act. (3) The · proper officer shall,· . after considering the representation,· if any, ma.e •by the person on· whom the notice is served under•sub-section (2), .. determine the amount due from such person and'thereupon such person shall pay the amount so determiried. (4) The person referred to in sub-section (l) shall in addition to paying· the amount referred to ul' sub-section ( l) or sub-section (3) also beliable to pay· interest thereon at the rate specined un?r section. from the date such amount was collected by him. to the date such amount is paid by him to the Government. (5) An opportunity of he? shallbe gran? .where a request is received in writing from the person to whom the notice was issued to show cause. ( 6) The proper pfficer shall ?ue an order within one year fromthe date of issue of the notice. (7) Where the issuance of order is stayed by an order of the court or Appellate Tribunal, the period of such -stay shall be excluded in computing th.e period of o,:ie ye,r. (8) The proper officer, in.his order, shall set out the relevant facts and the basis·ofhis decision.' /-i<> Tax collected.but not paid to Government. ·

(9) The amount paid t() the Government under sub-sett.ton (lJ or sub-section'(3) shallbe"?? against'tlte? pa?ble, if any, by the, persotfin'relation to the supplies referred to in sub-secfion (1). · . . _, ?- ( 10). Where any surplus is left afltrtlie ?ustm?t Wlcler sub- section (9), the amount of suqi surplus shall either be credited to μte Fund or refunde? to the person who bas home the iacidence of such amount ( 11) The person who has borne the incidence of the amount may apply for the refund of.the same in accordance? .. the provisions of section 54. · •· 77. (l) A registered per50l1 who bas paid the central. tu and State tax on a tranSaction considered by ·binl to be an intra-State, supply, but which is · subsequently held to be an inter-State supply,. shall be refunded the amount of taxes so paid in such manner and subject to such conditions as may be prescribed. · (2) A registered person wbo ba,,.paid integrated tax on a transaction .considered by,·:hiJn to be an inter-State supply. but which. is ..ubsequently held to be an intra-.,. State supply, shall.not be required to pay any interest on the amount of Staie tu.payable. . Tax wrongfully ? and paid to ec. Government or

( 1) All ·officers of· Police, •Railways,• CUst? .. and those Officers to assist pn engaged in the· collection of bind tevenll'.e, including oflic:ers. village officers, and officers of central tax and officers of the Union tenitory. tax? assist the proper officers in the implementation, of'this Act. 'IheGovernment: m?y s.. by. notification, .: empower and require any other class of o#.ficers. to. assist the propel'. officers in. the implementation of this Act w'h?n called upon to do so by the Commissioner. 87 CHAPTER XV DEMANDS AND RECOVERY