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If GST officers search your premises, seize records or goods, or stop a consignment in transit, first identify the legal provision on the notice. A search or seizure under section 67 of the Central Goods and Services Tax (CGST) Act has different safeguards, forms, release rules and deadlines from detention of goods in transit under section 129. Ask for the written authorization and orders, preserve a precise record of what happened, protect your copy and inspection rights, and make any release request in writing.
Start by identifying which GST power is being used
Do not treat every GST intervention as a “seizure.” The document served on you should indicate the section, issuing authority and relief or response available. The two routes most often confused are section 67 and section 129 of the CGST Act.
| Issue | Section 67: search or seizure | Section 129: goods detained in transit |
|---|---|---|
| Typical situation | Officers inspect premises, search for concealed goods or records, or seize goods, books or documents connected with suspected tax evasion or goods liable to confiscation. | Goods are being transported or stored in transit in contravention of the Act or Rules. |
| Key paperwork | Written authorization (the rules identify Form GST INS-01), seizure order (INS-02), inventory, or a prohibition order where physical seizure is impracticable (INS-03). | Detention or seizure order, followed by a statutory notice and an order determining the applicable consequence. |
| Release framework | Section 67(6) and Rule 140: provisional release against the prescribed bond and security, or the applicable tax, interest and penalty payment route. | A separate penalty, hearing and release process. Its calculations are not the section 67 provisional-release formula. |
| Important time limit | If no notice concerning seized goods is issued within six months, section 67(7) provides for return, subject to a possible extension of up to a further six months for sufficient cause. | The current section 129 text identified here provides for notice within seven days and an order within seven days of service of the notice. Verify the current amended text for your case. |
State and Union Territory GST enactments generally follow a corresponding structure, but the actual authority, form, amendment history and order in your file control. Confirm whether the matter is under central tax, a state or Union Territory tax administration, or an integrated-tax authority before relying on a procedural detail.
Your rights during a section 67 search or seizure
Ask for the written authorization
For an inspection under section 67(1), the proper officer must be not below the rank of Joint Commissioner and must have reasons to believe that specified evasion-related circumstances exist. These include suppression of transactions or stock, excess input tax credit claims, or specified conduct by transporters or warehouse operators involving untaxed goods or records kept in a way likely to cause evasion.
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Section 67(2) concerns search and seizure where the proper officer has 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. Ask to see the authorization and retain a copy or photograph if permitted. Note the authorization number, date, issuing officer and premises covered; do not assume that an authorization for one location or category automatically extends to another.
Check the seizure order and inventory
The rules identify Form GST INS-02 for an order of seizure. An inventory should describe each item, state quantity and unit, and include make, mark or model where applicable. The person from whose custody the goods or records are seized should sign the inventory. Compare every line with what officers actually take: count cartons, record serial numbers, note damaged or missing items, and mark discrepancies in writing before signing. Keep a copy with the case file.
If physical seizure is impracticable, Form GST INS-03 is used to prohibit dealing with the goods. A prohibition order is not permission to continue trading with the stock. Do not move, sell, transfer, consume or otherwise deal with goods covered by it without the required permission. Arrange safe custody only as directed and document the location and condition of the goods.
Get supervised copies or extracts of seized records
Section 67(5) recognizes a specific entitlement for the person from whose custody documents are seized:
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“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.”
Make a written request identifying the documents, the preferred copying date and the person who will attend. The proper officer may refuse or limit copying where, in the officer’s opinion, it would prejudice the investigation. Ask that any refusal, limitation or alternative date be recorded in writing.
What to do when officers arrive: a practical sequence
- Remain cooperative and avoid obstruction. Do not hide, move or destroy goods or records. Calmly ask the officers to identify themselves and state the statutory provision being invoked.
- Record the event. Note the date, start and end times, address, officers’ names and designations where available, rooms or vehicles covered, and the names of employees or other witnesses present.
- Call your GST adviser or lawyer promptly. Professional advice is especially important where goods are perishable, high-value, depreciating or needed for continuing operations. Do not make unsupported admissions merely to end the visit.
- Request the paperwork. Ask to inspect or receive the written authorization, the applicable seizure or prohibition order, and the inventory. Identify whether the document invokes section 67, section 129 or another provision.
- Verify the inventory before signing. Match descriptions, quantities, units, marks, makes, models and serial numbers to the physical items. Record any disagreement next to your signature and request a copy.
- Protect business records. Preserve invoices, purchase and sale ledgers, stock registers, GST returns, e-way bills, transport documents, correspondence and digital backups. Do not alter source records after the search.
- Request copies of seized documents. Use a dated written request under section 67(5), and keep proof of delivery and any response.
- Prepare a chronology. Create a time line covering the search, seizure, service of each order, copying requests, release applications and responses. Calendar every statutory date.
How provisional release of seized goods works under section 67
Section 67(6) provides a route for provisional release of seized goods on a bond and prescribed security, or through payment of the applicable tax, interest and penalty, as the case may be. Rule 140 supplies the principal form and security structure for the bond route.
| Route | What the rule or Act requires | Questions to put in writing |
|---|---|---|
| Bond and security | Form GST INS-04 bond for the value of the goods, together with a bank guarantee equivalent to the applicable tax, interest and penalty. | How was the goods value calculated? What tax, interest and penalty figures support the bank-guarantee amount? What are the release conditions and validity period? |
| Payment route | Payment of the applicable tax, interest and penalty, where that statutory route is available to the facts. | Which provision authorizes the amount, and does payment resolve only custody or also the underlying proceedings? |
Apply promptly if continued detention threatens production, resale, storage capacity or the condition of the goods. Identify each seized item, explain the operational impact, offer the required bond or security, and ask for a reasoned written response. Keep proof of submission and follow up through the designated officer rather than relying on an oral assurance. Release of custody does not by itself decide whether tax, interest, penalty or confiscation proceedings will ultimately succeed.
Track the six-month notice deadline
Section 67(7) says that if no notice concerning seized goods is given within six months, those goods shall 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. The clock is therefore important, but it is not a reason to assume that goods will automatically appear at your premises on the sixth month.
Record the seizure date, the date and mode of service of every notice, and any written extension. Before the initial six months expires, ask the department to confirm whether a notice has been issued and, if an extension is claimed, request the written order and its stated cause. Have counsel assess the file if the period has expired or the department’s notice is disputed. Keep the goods, inventory and custody evidence together so that a return request can identify exactly what must be handed back.
When goods are detained in transit under section 129
Section 129 applies when goods are transported or stored in transit in contravention of the Act or Rules. This can involve a vehicle stopped on the road, a consignment at a check point, or goods held while moving between locations. The process has its own notice, hearing, penalty and release rules; section 67’s bond and bank-guarantee arrangement should not be assumed to apply.
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Immediate evidence to preserve
- E-way bill, tax invoice, delivery challan and purchase or sale contract.
- Vehicle registration, driver and transporter details, loading records and route information.
- Detention or seizure order, the date and method of service, and any inspection report or photographs.
- Proof of the owner’s identity and authority of the person responding for the owner.
- Records showing tax charged, place of supply, quantity, value and the reason any document was unavailable or inconsistent.
Notice and hearing timetable
The current section 129 text identified for this guide provides that a notice is to be issued within seven days and an order within seven days of service of the notice. Penalty cannot be determined without an opportunity to be heard. Write down the exact service date because it controls your response and hearing preparation. The statutory text and amendments should be checked against the version in force for the date of detention before quoting a penalty or deciding whether to pay.
Decide whether to seek release or contest the detention
Ask the authority to state the legal category of the goods, the alleged contravention, the owner’s status and the calculation supporting the proposed release terms. Obtain case-specific advice before paying or furnishing security: section 129 consequences can differ depending on whether the owner comes forward and on the statutory category of goods. A release application should attach the transport documents, explain any discrepancy factually, request a hearing and reserve the right to challenge an incorrect classification or calculation.
Documents and controls that make a response stronger
- One case file: Keep the authorization, orders, inventory, notices, receipts, correspondence, photographs and a service log in chronological order.
- Independent stock reconciliation: Compare the inventory with purchase invoices, goods-received notes, stock software and physical counts. Preserve the pre-search version of each record.
- Digital preservation: Maintain read-only copies of relevant accounting exports, e-way bills, email and messaging records. Record who made each copy and when.
- Written release request: State the provision relied on, list the goods, propose the bond or security, explain urgency and request a speaking response.
- Deadline calendar: Use separate entries for seizure, notice service, hearing, proposed order, six-month expiry and any extension. Assign a person to check each date.
- Factual communications: Correct errors with documents and dates. Avoid destroying, backdating or “cleaning up” records after officers have attended.
Common mistakes and how to correct them
Assuming every detention is a section 67 seizure
A road-side hold may be section 129, with a different timetable and release calculation. Read the order heading and operative paragraph; ask the issuing officer to identify the section in writing.
Signing an inaccurate inventory without qualification
Your signature can be used to show that the listed quantity or description was accepted. Count and inspect the items, write a specific objection beside the signature, and retain a copy. If officers will not amend it, send a same-day written discrepancy report with photographs or stock records.
Waiting for an oral promise of release
Release depends on the statutory route, security and conditions. Submit a formal application and ask for the amount, bank-guarantee wording, bond form and decision in writing.
Missing service dates
A notice left with an employee, emailed to a registered address or handed to a driver may create a service dispute. Preserve the envelope, email headers, acknowledgement and recipient details, then have an adviser calculate the response period from the legally relevant service event.
Continuing to deal with goods under an INS-03 prohibition
Physical custody remaining with you does not mean the goods are free for sale or movement. Obtain permission before dealing with them and document every custody or condition check.
Limits of a general explanation
The CGST Act and Rules provide the central framework, while state and Union Territory enactments, current amendments, administrative instructions and the wording of your order determine the live procedure. Forms, electronic service methods and penalty calculations can change. This guide does not decide whether an officer had sufficient reasons to believe, whether a particular invoice establishes ownership, or what remedy is available against an adverse order. For a live matter, have a GST professional or lawyer review the authorization, inventory, notice, service evidence and statutory text in force on the relevant dates.
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Quick Recap
A concise action checklist
- Identify section 67, section 129 or another provision from the document served.
- Obtain the authorization, detention or seizure order and a complete inventory.
- Record officers, witnesses, locations, dates, times and service details.
- Request supervised copies or extracts of seized documents under section 67(5), subject to the investigation-prejudice exception.
- For section 67 goods, apply in writing under section 67(6) and Rule 140, using INS-04 and the prescribed security where appropriate.
- For transit goods, preserve transport evidence, observe the seven-day notice and order timetable stated in the current section 129 text, and seek a hearing.
- Calendar the six-month section 67 notice deadline and any written extension.
- Do not obstruct, conceal, alter records or deal with prohibited goods without permission.
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