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This guide explains the central CGST framework. State and Union Territory GST laws generally contain corresponding provisions, but the authority named on your paperwork, the current amendments and the applicable state rules control your case.
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Remain calm and do not obstruct the officers. Obstruction, concealment, destruction or alteration of records can create additional legal exposure. You can cooperate while protecting your procedural rights.
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- Ask which provision is being used. Request the written authorization or order and check whether it refers to section 67, section 129 or another provision. A section 67 search is ordinarily authorized through Form GST INS-01.
- Contact professional help. Call your GST adviser or lawyer promptly. Tell the adviser whether the goods are perishable, depreciating, needed for production or being held by a transporter.
- Protect original records. Continue preserving invoices, e-way bills, ledgers, stock registers, transport documents, returns, purchase and sale records, emails and correspondence. Do not backdate, rewrite or delete anything.
- Request copies. Keep copies or photographs of the authorization, seizure or detention order, inventory, notice, acknowledgement and service details in a dedicated case file.
Do not sign a statement or inventory you cannot read or do not understand. Ask for corrections to factual errors and record any refusal to correct them. A signature acknowledging receipt is not necessarily an admission, but the wording of each document matters.
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Section 67 search and seizure: when it can be used
Section 67 distinguishes inspection from search and seizure. Under section 67(1), a proper officer not below the rank of Joint Commissioner must have reasons to believe that specified circumstances exist, such as suppression of transactions or stock, excessive input-tax-credit claims, or conduct by a transporter or warehouse operator involving goods or records kept in a way likely to cause tax evasion.
Section 67(2) concerns search and seizure. The authorized officer must have reasons to believe that goods liable to confiscation, or relevant documents, books or things, are secreted in a place. A Joint Commissioner or higher-ranking officer may conduct the action or authorize another central-tax officer in writing. The written authorization should identify the premises and the scope of the action. Read it carefully rather than assuming that every item at a location is covered.
The central legislation is supplemented by the CGST Rules. In practice, the forms and the statutory section cited on them help establish whether the department is conducting a section 67 action or using a different power. Confirm the corresponding state or Union Territory enactment if the notice comes from a state tax authority.
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For a section 67 operation, the rules identify several forms and safeguards. Form GST INS-01 is used for authorization of inspection, search and seizure. Form GST INS-02 records an order of seizure. If physical removal is impracticable, Form GST INS-03 can prohibit a person from dealing with specified goods without prior permission. Goods may remain with the owner or custodian for safe custody when the officer entrusts them there, but the prohibition still applies.
An inventory is not a formality. Compare every line with what was actually taken or placed under restriction.
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| Inventory detail | What to verify |
|---|---|
| Description | Brand or generic description, product type, grade, serial number or other identifying feature where relevant. |
| Quantity and unit | Count, weight, volume, cartons, pieces or another stated unit; check totals against stock records. |
| Make, mark or model | Record these where applicable, especially for machinery, electronics, vehicles or branded products. |
| Custody and location | Whether officers removed the item or left it with an owner or custodian subject to a prohibition. |
| Signatures | The person from whose custody goods or records were seized should be asked to sign the inventory after checking it and receiving a copy. |
If an item is missing from the inventory, described inaccurately or counted incorrectly, raise the discrepancy in writing immediately and retain proof of delivery. Do not move, sell, transfer, consume or alter goods covered by an INS-03 prohibition unless the department gives permission.
Your rights when books and documents are seized
Section 67(5) gives the person from whose custody documents are seized a right to make copies or take extracts in the presence of an authorized officer at the place and time indicated by that officer. The exception is important: the proper officer may refuse copying or extraction if, in the officer’s opinion, it would prejudicially affect the investigation.
“The person from whose custody any documents are seized under sub-section (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.”
Send a written request identifying the documents, the preferred date and the people who will attend. Ask the officer to specify any refusal and its reason. Create a secure duplicate of permitted material, preserve metadata where electronic records are involved, and maintain a list of documents that remain unavailable.
How seized goods can be released under section 67
Section 67(6) provides a route for provisional release of seized goods against a prescribed bond and security. It also recognizes a payment route for applicable tax, interest and penalty, as the circumstances require. Rule 140 sets out the bond-and-bank-guarantee mechanism.
| Route | What it involves | Practical action |
|---|---|---|
| Provisional release under section 67(6) and Rule 140 | Form GST INS-04 bond for the value of the goods plus a bank guarantee equivalent to applicable tax, interest and penalty. | Apply in writing, identify the goods and explain business or deterioration risk; request the precise amount, format and release conditions. |
| Payment route | Payment of applicable tax, interest and penalty where that statutory option is appropriate to the case. | Obtain advice before paying; payment can affect later positions, disputes and cash flow. |
| Continued custody or prohibition | Goods remain seized or subject to an INS-03 restriction while the investigation proceeds. | Secure the goods, prevent unauthorized dealing and seek a written explanation of the next procedural step. |
A release request should include the seizure order, inventory, ownership or possession documents, invoices, stock records, valuation information, details of tax already paid, and an explanation of why delay causes loss. Ask for a reasoned written response if the officer seeks a different security amount or rejects the request. For perishable or rapidly depreciating goods, state the expected loss and the date by which a decision is needed.
Track the six-month notice deadline
Section 67(7) says that if no notice in respect of seized goods is given within six months, the goods must be returned to the person from whose possession they were seized. For sufficient cause, the proper officer may extend that period by no more than a further six months.
Build a deadline table from the seizure date, not from an informal visit or telephone call. Record the date of seizure, the date and method of service of any notice, the alleged extension, its stated reason and the revised deadline. Request a copy of any extension order. The statutory period is not a guarantee that goods will physically come back automatically on the next day; check the file and obtain advice if the period expires without a notice or a documented extension.
Goods detained while in transit: section 129 is different
Section 129 applies when goods are transported or stored in transit in contravention of the Act or Rules. It is not simply a mobile version of a section 67 search. The detention or seizure order, notice, hearing and release consequences follow a separate process.
The current section 129 text identified for this guide provides for a notice within seven days and an order within seven days of service of the notice. Penalty cannot be determined without giving the affected person an opportunity to be heard. Because amendments can change wording and calculations, verify the current text printed on the notice and obtain advice before quoting or paying a specific amount.
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| Issue | Section 67 search or seizure | Section 129 transit detention |
|---|---|---|
| Typical setting | Premises, warehouse, office or another place where goods, books or records are believed to be secreted. | Goods being transported or stored in transit. |
| Key documents | Written authorization, often INS-01; seizure order INS-02; inventory; possibly INS-03 prohibition. | Detention or seizure order, notice, hearing communication and final order. |
| Release framework | Section 67(6) provisional release; Rule 140 INS-04 bond and bank guarantee, or applicable payment route. | Statutory section 129 payment or security process; do not assume section 67 terms apply. |
| Important timing | Six months for notice concerning seized goods, extendable for sufficient cause by up to six more months. | Notice within seven days and order within seven days of notice service under the cited current text, subject to amendments. |
For a transit case, preserve the e-way bill, tax invoice, delivery challan, vehicle and driver details, consignment records, detention order, notice, proof of service and any representation. Write down the response deadline and hearing date immediately. Section 129 consequences can depend on whether the owner comes forward and on the statutory category of goods, so do not select a payment or security option without reviewing the actual notice.
Build a case file that can be checked quickly
A chronological file helps your adviser identify missed steps and helps you answer factual questions consistently. Use a separate index for each seized item or consignment.
- Authority: authorization, officer details, premises or vehicle identified, and statutory section.
- Inventory: signed list, photographs, serial numbers, quantities, units, condition and location.
- Commercial proof: purchase and sales invoices, contracts, stock ledger, payment records and ownership documents.
- Movement proof: e-way bill, vehicle documents, transporter instructions, delivery challan and loading or unloading records.
- Tax proof: GST returns, input-tax-credit workings, payment challans and reconciliations for the relevant periods.
- Correspondence: release application, copying request, replies, hearing notices, service evidence and extension orders.
- Deadlines: seizure date, notice date, hearing date, response date, six-month date and any documented extension.
Keep the original source records unchanged. If a correction is necessary, preserve the original and document who made the correction, when and why. Unsupported admissions or speculative explanations can be difficult to retract; answer factual questions accurately and ask for time to verify figures.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Common mistakes and how to correct them
Treating every detention as a section 67 seizure
A vehicle stopped in transit may be under section 129, with different deadlines and release calculations. Read the cited section and the description of the goods’ movement before preparing an application.
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Signing an inaccurate inventory
Check quantity, unit, model and condition line by line. Mark a specific objection in writing, request a corrected copy and preserve evidence of the discrepancy.
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Waiting for a verbal release promise
Use a written application that identifies the statutory route, security requested, goods at risk and documents enclosed. Ask for a written decision and record when it was served.
Missing service dates
Deadlines run from legally relevant events such as seizure or service, not from the date an employee happens to read a message. Keep envelopes, email headers, portal acknowledgements and delivery records.
Assuming the six-month rule guarantees immediate return
Check whether a notice or valid extension exists and seek advice on the appropriate written request or remedy. Do not remove or deal with goods while an order or prohibition remains in force.
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- Read the document heading and statutory citation. Classify the matter as section 67, section 129 or another process.
- Match the goods and records to the inventory. Separate physically seized items from goods left with a custodian under a prohibition.
- Calendar every date. Include notice, hearing, response, six-month and extension dates.
- Choose the request. For section 67 goods, consider provisional release under section 67(6) and Rule 140; for transit goods, follow the section 129 notice and hearing process.
- Submit evidence and preserve proof. File a complete written application and retain acknowledgement, attachments and service evidence.
- Escalate promptly if the process stalls. A GST lawyer can assess representations, statutory remedies and any urgent issue involving perishable goods, business continuity or an expired deadline.
Further procedural reference
The National Academy of Customs, Indirect Taxes and Narcotics (NACIN) has published a Handbook of GST Law and Procedures described as covering search, seizure and sections 67–72 with Rules 138–141. Treat it as general procedural reading and verify the edition, current forms and amendments against the legislation and your authority’s documents.
Quick Recap
Key takeaways
- Demand clarity about the statutory route before relying on any release rule.
- For section 67, inspect the written authorization, INS-02 seizure order, inventory and any INS-03 prohibition.
- Use the section 67(5) supervised-copy right for seized documents unless the proper officer states the investigation-prejudice exception.
- Request provisional release in writing; Rule 140 specifies the INS-04 bond and bank guarantee structure.
- Track the six-month notice period and any written extension.
- For goods in transit, preserve every movement document and follow section 129’s separate notice, hearing and order timetable.
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