Inspection and Search: Section 67

A visit by GST officers to business premises is unsettling partly because it is unfamiliar. The person in charge may not know what the officers are entitled to do, what document authorises them, what is recorded, and what the person is entitled to receive at the end. The Act and the rules answer most of those questions. CBIC’s instructions to its own officers answer more, and the Supreme Court has said how the general criminal procedure fits around them.

This guide covers inspection and search under section 67 and rule 139. Seizure of what is found, and its release, is covered in the next guide. Statements recorded under summons are covered in the guide on summons under section 70. The guide describes the powers and the safeguards as the provisions and instructions state them. CBIC’s instructions bind central tax officers; State tax officers exercise the same powers under the State GST Acts and work under their own administration’s instructions.

Two powers: inspection and search

Section 67 separates the two.

Inspection, under section 67(1). Where an officer “not below the rank of Joint Commissioner, has reasons to believe” either of two things, he “may authorise in writing any other officer of central tax to inspect”. The two things are:

• (a) that “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 … or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax”
• (b) that “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”

The places that may be inspected are the “places of business” of the taxable person, of transporters, of warehouse or godown owners or operators, “or any other place”.

Search, under section 67(2). Search requires a different belief: 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”. The Joint Commissioner may then “authorise in writing any other officer of central tax to search and seize or may himself search and seize”. A search may follow an inspection, or be ordered without one (“pursuant to an inspection … or otherwise”). It is not confined to business premises.

Both powers rest on “reasons to believe” formed by an officer of at least Joint Commissioner rank. CBIC’s Instruction No. 01/2020-21 (GST-Investigation), of 2 February 2021, requires that the officer authorising a search “should have valid and justifiable reasons for authorizing a search, which shall be duly recorded in the file”.

The authorisation: FORM GST INS-01

Rule 139(1) requires the Joint Commissioner to “issue an authorisation in FORM GST INS-01 authorising any other officer subordinate to him” to inspect, search or seize. The form:

• names the officer authorised
• states which belief the authorising officer has formed, by ticking the grounds that mirror section 67(1)(a), (1)(b) or (2)
• gives the details of the premises
• authorises either inspection under section 67(1), or search and seizure under section 67(2)
• states the number of days for which it is valid
• carries the signatures of the issuing authority and of the inspection officers

The form also warns that misleading the officers, tampering with evidence, refusing to answer questions relevant to the inspection or search, or making false statements is punishable. It cites the Act read with sections 214, 216, 227 and 318(3) of the Bharatiya Nyaya Sanhita, 2023. Notification No. 20/2024-Central Tax substituted that reference for the earlier Indian Penal Code references, from 1 November 2024.

CBIC’s Circular No. 122/41/2019-GST requires a Document Identification Number on search authorisations issued by central officers. A communication without one is “invalid and shall be deemed to have never been issued”, except in the exigencies listed in the circular, which must be recorded and regularised within fifteen working days. Circular No. 252/09/2025-GST treats the verifiable “Issue number” on a communication sent through CBIC’s eOffice as its DIN.

How a search is conducted

Section 67(10) applies the Code of Criminal Procedure “relating to search and seizure, so far as may be”, with one change: in section 165(5) of the Code, the Commissioner takes the place of the Magistrate. The Code has since been replaced by the Bharatiya Nagarik Suraksha Sanhita, 2023. Its section 185 corresponds to the old section 165, and its section 103 to the old section 100, which governs witnesses.

Section 103 of the Sanhita requires two or more “independent and respectable inhabitants of the locality” to witness a search, and requires the list of things seized to be signed by them. It also provides that “the occupant of the place searched, or some person in his behalf, shall, in every instance, be permitted to attend during the search”, and that a copy of the list signed by the witnesses “shall be delivered to such occupant or person”.

Instruction No. 01/2020-21 restates these requirements for central GST officers and adds to them. Among its directions:

• a search only on a proper authorisation from the competent authority, with a DIN
• no search of one person’s premises on an authorisation issued for another’s
• a woman officer in the team for the search of a residence
• two or more independent witnesses, informed of the purpose of the search and of their duties
• officers to show their identity cards to the person in charge, and officers and witnesses to offer themselves for personal search before and after
• the authorisation shown to the person in charge before the search starts, with that person’s and the witnesses’ signatures, date and time recorded on it
• “sensitive” conduct: children allowed to go to school after their bags are examined, a doctor called if someone is unwell, and respect for social and religious sentiments
• videography in sensitive premises “may also be considered”, and recorded in the panchnama
• officers to leave “immediately after completion of Panchnama proceedings”

Where access is denied, section 67(4) allows the authorised officer “to seal or break open the door of any premises or to break open any almirah, electronic devices, box, receptacle” in which goods, accounts, registers or documents are suspected to be concealed. Rule 150 allows the proper officer to seek assistance from the jurisdictional police station.

The panchnama

The panchnama is the record of the search, drawn up in the presence of the witnesses. It is not a statutory form; its contents are fixed by Instruction No. 01/2020-21. It must:

• contain “a truthful account of the proceedings”
• list the documents, goods and things recovered
• state the date and time the search started and ended
• record that officers and witnesses offered themselves for personal search
• record any request to take copies of documents, with the place and time fixed for it
• be signed on every page, with its annexures, by the officer authorised to search

A copy of the panchnama and all its annexures “should be given to the person in-charge of the premises”, against acknowledgement. If that person refuses to sign, the panchnama may be pasted in a conspicuous place in the presence of the witnesses, and photographed. If a statement is recorded during the search, each page must be signed by the person making it and by the officer, who signs it “before me”.

Instruction No. 01/2023-24-GST (Inv.), of 30 March 2024, requires the outcome of a search or inspection, including the panchnama, to be uploaded to the e-office file, and submitted to the Additional or Joint Commissioner within four working days.

Documents: copies, and their return

Two provisions govern documents taken during a search.

Copies, under section 67(5). The person from whose custody documents are seized “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”. The exception is “where making such copies or taking such extracts may, in the opinion of the proper officer, prejudicially affect the investigation”. Instruction No. 01/2020-21 says a request made during the search may be recorded in the panchnama, with the place and time for copying.

Return, under section 67(3). Documents, books or things seized or produced “which have not been relied upon for the issue of notice … shall be returned to such person within a period not exceeding thirty days of the issue of the said notice”. The second proviso to section 67(2) adds that seized documents “shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings”.

Section 67(11) is a separate power. Where the proper officer believes a person “has evaded or is attempting to evade the payment of any tax”, he may, recording reasons, seize the accounts, registers or documents “produced before him”, and “shall grant a receipt for the same”.

Payment during a search

Section 67 is not a recovery provision. CBIC’s Instruction No. 01/2022-23 (GST-Investigation), of 25 May 2022, says so directly. It notes that some taxpayers who paid through DRC-03 during a search later “alleged use of force and coercion”. It clarifies that “there may not be any circumstance necessitating ‘recovery’ of tax dues during the course of search or inspection or investigation proceedings”. Recovery comes only after a notice and an order confirming the demand. The instruction also says the law does not bar a person from paying voluntarily at any stage. Officers are to “inform the taxpayers regarding the provisions of voluntary tax payments through DRC-03”. Complaints of force or coercion are to be enquired into “at the earliest”.

What the Supreme Court said in Radhika Agarwal

Radhika Agarwal v Union of India (Supreme Court, 27 February 2025; Sanjiv Khanna CJI, M.M. Sundresh and Bela M. Trivedi JJ.) was a batch of writ petitions and appeals. They challenged the arrest and summons provisions of the Customs Act and the GST Acts, and the way those powers were being used. Its main subject is arrest under section 69. Three points bear on search.

The general criminal procedure applies. The Court noted that section 67(10) applies the Code’s search and seizure provisions. It held that “the GST Acts are not a complete code when it comes to the provisions of search and seizure, and arrest”, so the Code applies wherever the GST Acts do not expressly or impliedly exclude it.

Payment must be voluntary. The Court quoted Instruction No. 01/2022-23 and held that “the aforesaid circulars are binding and should be adhered to in letter and spirit”. It observed that the pre-notice payment provision in section 74(5) “relates to voluntary payment, and does not postulate payment under force, coercion or threat of arrest”. It asked CBIC to frame clear guidelines so that no taxpayer is “threatened with the power of arrest for recovery of tax in the garb of self-payment”.

Coerced payments can be recovered. “In case there is a breach of law, and the assessees are put under threat, force or coercion, the assessees would be entitled to move the courts and seek a refund of tax deposited by them”. The department “would also take appropriate action against the officers in such cases”.

The Court upheld the validity of the arrest and summons provisions. It rejected the constitutional challenge “with elucidation and clarification” on how the power of arrest is to be exercised. At its 57th meeting on 8 October 2026, the GST Council recommended the “complete withdrawal of arrest powers under GST by omission of section 69”. That is recommended, not yet enacted; section 69 remains in force until Parliament amends the Act. The Council made no recommendation on section 67.

After the search

Instruction No. 01/2023-24 also sets expectations for what follows. An investigation “must reach the earliest conclusion which is not more than one year”. A show cause notice “should not be delayed after conclusion of investigation”. Conclusion may take the form of “recording that investigation is not being pursued further as nothing objectionable was found”. For central officers, the Additional or Joint Commissioner in charge of investigation is the grievance officer for an ongoing investigation, approachable by letter, email or appointment.

Anything found may lead to a show cause notice under section 73, 74 or 74A. Those are covered in the guides on the show cause notice and on notices and demands.

Inspection and search, in order

1. A Joint Commissioner or higher officer forms reasons to believe under section 67(1) or (2), records them, and issues an authorisation in INS-01, with a DIN for central officers.
2. The authorised officers identify themselves, show the authorisation to the person in charge, and have it signed with date and time.
3. Two or more independent witnesses attend. The occupant, or someone on his behalf, is entitled to attend the search.
4. Goods, documents or things found are listed. Seizure is made in INS-02, or a prohibitory order in INS-03 where seizure is not practicable (see the next guide).
5. A panchnama records the proceedings, and a copy with its annexures is given to the person in charge.
6. The person may take copies of seized documents at a time and place the officer fixes, unless the officer considers that this would prejudice the investigation.
7. Documents not relied upon in a later notice are returned within thirty days of that notice.
8. Any payment of tax during or after the search is voluntary, through DRC-03. Recovery under section 79 requires a notice and an order.

The next guide covers seizure under section 67(2): the seizure and prohibitory orders, provisional release on a bond and security, and the six-month limit for issuing a notice.