Section 67 is the department's power to enter premises, search them, and seize goods, documents and things. It is exercised on the authority of a Joint Commissioner who must have "reasons to believe", and it is hedged with time limits: seized goods must be followed by a notice within six months, and documents not relied on must be returned.
Key points
- Under section 67(1) of the CGST Act, 2017 an officer not below Joint Commissioner who has reasons to believe that a taxable person has suppressed transactions or stock, claimed excess credit or contravened the Act to evade tax — or that a transporter or warehouse keeper holds goods that escaped tax — may authorise inspection of the premises.
- Under section 67(2), on reasons to believe that goods liable to confiscation, or documents, books or things useful for proceedings, are secreted, he may authorise search and seizure (Form GST INS-01; seizure in INS-02).
- Seized goods may be released provisionally on a bond and security or on payment of tax, interest and penalty (section 67(6)); if no notice is issued within six months of seizure (extendable by six months), they must be returned (section 67(7)).
- Documents not relied on in the notice must be returned within thirty days of the notice (section 67(3)).
- Cash is "money", not "goods", and cannot be seized as such under section 67(2) (Deepak Khandelwal v Commissioner of CGST, Delhi HC, 2023; the department's SLP was dismissed).
The provisions
67(1)Inspection
Statutory text
(1) Where the proper officer, not below the rank of Joint Commissioner, has reasons to believe that-
(a) a taxable person has suppressed any transaction relating to supply of goods or services or both or the stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act; or
(b) any person engaged in the business of transporting goods or an owner or operator of a warehouse or a godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under this Act,
he may authorise in writing any other officer of central tax to inspect any places of business of the taxable person or the persons engaged in the business of transporting goods or the owner or the operator of warehouse or godown or any other place.
*Enforced w.e.f. 1st July, 2017.
- Rule 139, CGST Rules; Forms GST INS-01 to INS-05
67(2)–(7)Search and seizure; release; time limits
Statutory text
(2) Where the proper officer, not below the rank of Joint Commissioner, either pursuant to an inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in writing any other officer of central tax to search and seize or may himself search and seize such goods, documents or books or things:
Provided that where it is not practicable to seize any such goods, the proper officer, or any officer authorised by him, may serve on the owner or the custodian of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer:
Provided further that the documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under this Act.
(3) The documents, books or things referred to in sub-section (2) or any other documents, books or things produced by a taxable person or any other person, which have not been relied upon for the issue of notice under this Act or the rules made thereunder, shall be returned to such person within a period not exceeding thirty days of the issue of the said notice.
(4) The officer authorised under sub-section (2) shall have the power to seal or break open the door of any premises or to break open any almirah , electronic devices, box, receptacle in which any goods, accounts, registers or documents of the person are suspected to be concealed, where access to such premises, almirah , electronic devices, box or receptacle is denied.
(5) The person from whose custody any documents are seized under subsection (2) shall be entitled to make copies thereof or take extracts therefrom in the presence of an authorised officer at such place and time as such officer may indicate in this behalf except where making such copies or taking such extracts may, in the opinion of the proper officer, prejudicially affect the investigation.
(6) The goods so seized under sub-section (2) shall be released, on a provisional basis, upon execution of a bond and furnishing of a security, in such manner and of such quantum, respectively, as may be prescribed or on payment of applicable tax, interest and penalty payable, as the case may be.
(7) Where any goods are seized under sub-section (2) and no notice in respect thereof is given within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized:
Provided that the period of six months may, on sufficient cause being shown, be extended by the proper officer for a further period not exceeding six months.
What it means
Search may follow an inspection or be ordered directly. Where seizure is impracticable, a prohibitory order (INS-03) may be served on the owner or custodian. Documents seized may be kept only so long as necessary for inquiry; the person may take copies unless that would prejudice the investigation. Goods are released provisionally on a bond for their value and security of an amount equal to the applicable tax, interest and penalty (Rule 140), or on payment of those amounts.
Tax "paid" during a search must be voluntary. CBIC Instruction 01/2022-23 (GST-Investigation), 25.05.2022, forbids recovery by coercion during search; the Supreme Court in Radhika Agarwal (2025) said a taxpayer forced to pay may seek a refund. See section 69.
- Rule 140, CGST Rules — bond and security for provisional release
- CBIC Instruction 01/2022-23 (GST-Investigation), 25.05.2022
Case on this provision
Deepak Khandelwal v Commissioner of CGST, Delhi West
Delhi High Court, 17.08.2023 · 17.08.2023 · Delhi High Court, Division Bench (Vibhu Bakhru, Purushaindra Kumar Kaurav JJ.)
- Facts
- In a search of a trader's residence on 28.01.2020 under section 67(2), in an inquiry into invoices issued without supply, officers seized about Rs. 7 lakh in cash, two silver bars, phones, cheque books and documents. The show cause notice issued later, on 10.11.2020, did not rely on the cash or silver.
- Held
- Section 67(2) permits seizure of goods liable to confiscation and of documents, books or things useful for proceedings. Cash is "money", which the Act excludes from "goods", and "things" takes colour from "documents" and "books", so the search power cannot be used merely to seize cash or valuables as apparently unaccounted wealth with no demonstrated connection to GST proceedings. In the alternative, section 67(3) required their return because the notice later issued did not rely on them. The six-month point under section 67(7) was argued but not decided. The department's special leave petition was dismissed on 14.08.2024 and its review petition on 19.08.2025.
- Here
- Officers may seize goods and evidence, not wealth. Cash or valuables may be seized only as "things" useful as evidence, and even then must be returned under section 67(3) if the notice does not rely on them; Rajasthan and Calcutta High Court decisions take the same view.
67(8)–(12)Disposal; CrPC; seizure of records; test purchase
Statutory text
(8) The Government may, having regard to the perishable or hazardous nature of any goods, depreciation in the value of the goods with the passage of time, constraints of storage space for the goods or any other relevant considerations, by notification, specify the goods or class of goods which shall, as soon as may be after its seizure under sub-section (2), be disposed of by the proper officer in such manner as may be prescribed.
(9) Where any goods, being goods specified under sub-section (8), have been seized by a proper officer, or any officer authorised by him under sub-section (2), he shall prepare an inventory of such goods in such manner as may be prescribed.
(10) The provisions of the Code of Criminal Procedure, 1973, relating to search and seizure, shall, so far as may be, apply to search and seizure under this section subject to the modification that sub-section (5) of section 165 of the said Code shall have effect as if for the word "Magistrate", wherever it occurs, the word "Commissioner" were substituted.
(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.
(12) The Commissioner or an officer authorised by him may cause purchase of any goods or services or both by any person authorised by him from the business premises of any taxable person, to check the issue of tax invoices or bills of supply by such taxable person, and on return of goods so purchased by such officer, such taxable person or any person in charge of the business premises shall refund the amount so paid towards the goods after cancelling any tax invoice or bill of supply issued earlier.
What it means
Perishable or hazardous goods notified by the Government may be disposed of soon after seizure, after an inventory (Rule 141). Searches follow the Code of Criminal Procedure (now the Bharatiya Nagarik Suraksha Sanhita, 2023), with the Commissioner substituted for the Magistrate in section 165(5). Sub-section (11) lets the proper officer seize records produced before him where he believes tax is being evaded. Sub-section (12) permits test purchases to check whether invoices are issued; the purchase is refunded and the invoice cancelled when goods are returned.
Statutory text as published on the CBIC tax information portal, as on 03.10.2026; the numbered notes record each amendment. Official source
Common questions
- Can GST officers seize cash during a search?
- Not as "goods". The Delhi High Court held in Deepak Khandelwal (2023) that cash is money, excluded from goods, and section 67(2) cannot be used to seize cash or valuables without a demonstrated link to GST proceedings; the Supreme Court dismissed the department's appeal.
- What happens if no notice is issued after GST seizure?
- Seized goods must be returned if no notice is issued within six months of seizure, extendable by a further six months for sufficient cause (section 67(7) CGST).
Commentary and case notes checked against the judgments and CBIC sources on 04.10.2026.
What it means
"Reasons to believe" is a higher standard than suspicion: it must rest on material, be recorded, and be capable of judicial review. Inspection is authorised in Form GST INS-01 and extends to the business premises of the taxable person and of transporters and warehouse operators.