Chapter VIII INSPECTIONS, SEARCH AND SEIZURE

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56. Production of books of account, inspection, search and seizure.

Statutory text

(1) Subject to such rules as may be made by the State Government under this Act, any authority appointed under sub-section (1) of section 10 may, either before or after assessment, require any dealer to produce before it or him any accounts, registers or documents or to furnish any information relating to the details of his purchases and sales and the stock of goods produced, raised, processed, manufactured, bought, sold or delivered by such dealer, and the dealer shall comply with such requirement.
(2) If reasonable grounds exist to suspect that--
- (a) a dealer, with an intention to reduce his tax liability under the Act, has suppressed any financial transaction, element of value addition implicit in the transaction or the stock of goods produced, raised, processed, manufactured, bought, sold or delivered by such dealer or has claimed input tax credit in excess of his entitlement; or
- (b) any clearing or forwarding agent or a person engaged in the business of transporting goods or owner of a warehouse or a godown is keeping or has kept his accounts in such a manner as is likely to cause evasion of tax payable under this Act, the prescribed authority shall, after making such further inquiries as may be deemed fit and after obtaining such authorisation in the manner prescribed, proceed to inspect all the places of business of the dealer or the clearing or forwarding agent or the person engaged in the business of transporting goods or the owner of warehouse or godown: Provided that if the prescribed authority is satisfied that delay in obtaining such authorisation may be prejudicial to the interest of revenue, he may, for reasons to be recorded in writing, proceed to inspect all the places of business of the dealer or the clearing or forwarding agent or the person engaged in the business of transporting goods or the owner of warehouse or godown without obtaining such authorisation which may be granted subsequently.
(3) The prescribed authority shall have the powers to enter into and search the premises, including the place of business, of such dealer or the person and, for reasons to be recorded in writing, seize such accounts, registers or documents of the dealer or the person as may be necessary, in the manner prescribed, and shall retain the same for so long as may be necessary in connection with any proceeding under this Act or for a prosecution under any law: Provided that if the dealer or person whose accounts, registers or documents have been seized, applies for a copy of the same, he shall be supplied with a photo-copy of the same on payment of appropriate cost into a Government Treasury or a bank authorised in this behalf by the State Government: Provided further that such authority or inspector may take or cause to be taken such copies of, or extracts from, the accounts, registers or documents, as such authority or inspector may consider necessary.
(4) (a) Any authority referred to in sub-sections (1) and (2) shall have the powers to seize any goods not properly accounted for in the books, accounts, registers and other documents of the dealer or the dalal as defined in clause (a) of the Explanation to section 59, or the owner of the warehouse, or the clearing, booking or forwarding agent, or the person engaged in the business of transporting goods in the manner prescribed.
- (b) The authority referred to in clause (a) shall, in a case where the dealer or the person in-charge of goods as mentioned in clause (a) fails to produce any evidence or fails to satisfy the said authority regarding the proper accounting of goods, impose a penalty, after allowing an opportunity of hearing in the prescribed manner to the dealer or such person, which shall be equal to three times the amount of tax calculated on the value of such goods and the goods shall be released as soon as the penalty is paid.
- (c) If the dealer or the person in-charge of the goods mentioned in clause (a) requests for time for production of necessary documents in support of proper accounting, the authority referred to in clause (a) shall release the goods on the condition that the dealer or such person deposits a security equivalent to three times the amount of tax calculated on the value of the goods, either in the form of cash, to be deposited in the Government Treasury, or in the form of bank guarantee acceptable to the authority.
- (d) If the goods seized under clause (a) are not claimed by any person, the authority referred to in the said clause shall arrange for the safe custody of goods.
- (e) In case the penalty imposed under clause (b) is not paid or the goods remain unclaimed for a period of thirty days or more from the date of seizure, the goods so seized shall be sold by auction in the prescribed manner and the sale proceeds shall be appropriated towards the amount of penalty imposed under clause (b); and the balance of the sale-proceeds, if any, shall be deposited in the Government Treasury and shall be refunded to the lawful claimant in the prescribed manner: Provided that in the case of goods of a perishable nature, the prescribed authority may decide to sell the goods by auction before a period of thirty days.
- (f) In case where the goods have been released on the deposit of a security as mentioned in clause (c) and evidence regarding proper accounting of goods, to the satisfaction of the authority referred to in clause (a) is not produced within thirty days from the date on which the security is deposited, the amount of security shall stand forfeited to the State Government: Provided that in case evidence or document to the satisfaction of the authority mentioned in clause (a) regarding the proper accounting of goods is produced within the said period of thirty days, the security shall be released in the prescribed manner.
(5) (a) The power conferred under sub-sections (3) and (4) shall include the power to break open the lock of any box or receptacle or door of any other place or premises where any accounts, registers or other documents or goods may be kept or are reasonably suspected to be kept.
- (b) The powers conferred under sub-sections (3) and (4) shall also include the power to seal any box or receptacle, godown or building where any accounts, registers or other documents or goods may be kept or are reasonably suspected to be kept.
(6) An authority appointed under section 10 may require the assistance of any person, public servant or police officer in making a search and a seizure or for safe custody of goods seized under this section, and such person, public servant or police officer shall render necessary assistance in the matter.
(7) Where any books of account, other documents, money or goods are found in the possession or control of any person in the course of any search under sub-section (2) or sub-section (3), it shall be presumed, unless it is proved to the contrary, that such books of account, documents, money or goods belong to such person. Explanation.–For the purposes of this section the expression "proper accounting", shall--
- (i) in the case of a dealer, mean that the goods have either not been entered in the books of account or they have been classified in a manner which is likely to lead to evasion of tax payable under this Act; or
- (ii) in the case of the owner of a warehouse, or a clearing, booking or forwarding agent, or a person engaged in the business of transporting goods, mean properly entered in such registers and accounts as may be prescribed under sub-section (2) of section 59.
(8) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to searches and seizure shall apply, so far as may be, to searches and seizure under this section.

Chapter VIII INSPECTIONS, SEARCH AND SEIZURE

57. Cross checking or verification of transactions.

Statutory text

(1) With a view to preventing evasion of tax payable under this Act and ensuring proper compliance with the provisions of this Act, the prescribed authority may, from time to time, collect information regarding sales and purchases effected by any class of dealers and cause any of such transactions of sale and purchase to be cross-checked.
(2) For this purpose, the prescribed authority may, from time to time and by issuing a notice, in the manner and form prescribed, require any class of dealers to furnish, before such authority and by such date as may be specified in the said notice, such information, details and particulars as may be specified in the notice, regarding the transactions of sales and purchases effected by the dealers during the period mentioned in the said notice.
(3) The prescribed authority shall cause any of such transactions to be cross-checked with reference to the books of account of the purchasing and selling dealers and for this purpose, the prescribed authority shall send an intimation required for the purpose of cross-checking, stating therein the details of the transactions proposed to be cross-checked and the time and date on which any officer or person duly authorised to cross check the transaction shall visit the place where the books of account are ordinarily kept by the dealer.

Chapter VIII INSPECTIONS, SEARCH AND SEIZURE

58. Survey.

Statutory text

(1) With a view to identifying dealers who are liable to pay tax under this Act, but have remained unregistered, the prescribed authority, shall, from time to time, cause a survey of unregistered dealers to be done for this purpose.
(2) For the purposes of the survey, the prescribed authority may, by notice in the prescribed form, require any dealer or class of dealers to furnish the names, addresses and other particulars, in the manner specified, of the persons and dealers who have purchased or sold any goods from, or, to, such dealer or class of dealers during a given period.
(3) For the purposes of survey, the prescribed authority may call for, by notice in the prescribed form, details and particulars regarding the services provided by public utilities, financial institutions including banking companies, clearing and forwarding agents, owners of warehouses, dalals and persons engaged in the business of transporting goods which such authority is of the opinion, shall be relevant and useful for the purposes of this Act.

Chapter VIII INSPECTIONS, SEARCH AND SEIZURE

59. Control on clearing, forwarding or booking agent and any person transporting goods.

Statutory text

(1) Every clearing, forwarding or booking agent or dalal or a person transporting goods, who during course of his business handles the document of title to the goods or transports goods or takes delivery of goods for or on behalf of a dealer and having his place of business in the State of Bihar, shall furnish true and complete particulars and information relating to his place of business to the prescribed authority, within such time and in such manner as may be prescribed.
(2) Every agent or person referred to in sub-section (1), shall maintain true and complete accounts, registers and documents, as may be prescribed, in respect of the goods handled by him and the documents of title relating thereto and shall produce the said accounts, registers and documents before the prescribed authority as and when required by him.
(3) If any agent or person referred to in sub-section (1) contravenes the provisions of sub-section (1) or sub-section (2) in a manner which is likely to lead to evasion of any tax payable under this Act, the prescribed authority may, without prejudice to any action under section 81, on charge of abetment, after giving such agent or person an opportunity of being heard, direct him to pay by way of penalty an amount which shall be equal to three times the amount of tax calculated on the value of goods in respect of which complete particulars have not been furnished or incorrect particulars or information have been furnished. Explanation.--For the purposes of this sub-section--
- (a) "dalal" shall include a person who renders his services for booking of, or taking delivery of, consignment of goods at a railway station, booking agency, goods transport company office, or any place of loading or unloading of goods or contrives, makes and concludes bargains and contracts for or on behalf of any dealer for a fee, reward, commission, remuneration or other valuable consideration or otherwise;
- (b) "person transporting goods" shall, besides the owner, include the manager, agent, driver or employee of the owner, or person in-charge of a place of loading or unloading of goods other than a rail-head, or a post office, or of a goods carrier carrying such goods, or a person who accepts consignments of such goods for despatch to other places or gives delivery of any consignment of such goods to the consignee.

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