Search and seizure provision under service tax
Finance Act, 2011, has empowered a Joint Commissioner (earlier Commissioner) to authorize a search under section 82 and the rights for execution of such search given to Superintendent.
The service tax rules allow the officers to excess the registered premises of the taxpayer for carrying out scrutiny, verification and checks as necessary to safeguard the interest of government revenue.
As per Section 82, where the Joint Commissioner (JC) has reason to believe that any document or books or things, which in his opinion will be useful for any relevant proceeding, are secreted in any place, , , he may authorize , any Superintendent of Central excise to search and seize or may himself do so
Search is not restricted to any particular premise, i.e. the premise need not be necessarily of the assessee
The term ‘secreted’ means kept in any place other than the usual or normal place with a view to hide / conceal them, where the officer of law cannot find it
Rights of assesses during search
The purpose of search proceedings is to collection of evidences of violations. However during the course of such search, the officers cannot
- Disrupt daily activities like production, sale or clearance
- Prevent communication with the legal advisor, business partners, clients, friends or relatives;
- Carry out their search in a surreptitious manner without allowing personnel to see what they are doing;
- Execute their search without identifying themselves individually so as to prevent any complaint of misconduct
At the entry point of premises, assessee has right to
- Ask each of the officers to identify themselves by showing their identity card
- Ask the leader of the team to show their authorization letter of Joint Commissioner before the search operation commences.
- In case of the premises under search are residential premises where women reside, no search can be carried out unless the search team includes a lady. Women’s rooms can only be searched in the presence of the female members of the search team. Women can only be searched by female members of the search team.
- Personnel can insist that the search operation is conducted in the presence of at least two independent witnesses.
Upon completion of the search, the records collected should be properly numbered and listed, and only listed documents and records should be taken away by the officers. In case of seizure of goods, they are not taken away except as samples. The seized goods are generally left with the owner himself under a document with a direction not to use or dispose off without the permission of the department.
Assessee on whom search is initiated can insist that a copy of the signed witness statement be provided at the end of the search.