Section 67 CGST Act vs BNSS: Who Is the Real Authority in GST Searches?

The law governing search and seizure under the GST regime has once again come under close scrutiny following the replacement of the Criminal Procedure Code, 1973 with the Bharatiya Nagarik Suraksha Sanhita, 2023.

The central issue is whether, in cases of apparent divergence between the CGST Act, 2017 and the BNSS, the general criminal procedure law can override the GST framework, particularly in matters relating to search authorisation, seizure procedures, and post-search compliances. This question has significant practical implications, as it directly affects the validity of search warrants issued by GST authorities and the procedural obligations imposed on officers after conducting searches.

Statutory Framework: Section 67 of the CGST Act

Section 67 of the CGST Act constitutes the statutory foundation for inspection, search, and seizure under GST. It empowers authorised officers to conduct searches where there is “reason to believe” that tax evasion, suppression of transactions, or wrongful availment of input tax credit has occurred. The provision is not merely an enabling clause but forms part of a carefully structured enforcement mechanism designed specifically for fiscal administration.

A crucial component of this mechanism is Section 67(10) of the CGST Act, which provides that the provisions of the CrPC relating to search and seizure shall apply to GST searches “so far as may be,” subject to the explicit modification that references to a “Magistrate” shall be construed as references to the “Commissioner.” This statutory substitution is deliberate and central to the GST enforcement architecture. It reflects Parliament’s intent to adapt criminal procedure norms to the administrative realities of tax enforcement rather than replicate them verbatim.

Who Is the “Commissioner” Under GST?

The term “Commissioner” under the CGST Act is defined in Section 2(24) to include the Commissioner and Principal Commissioner of Central Tax, as well as the Commissioner of Integrated Tax. Significantly, the Commissioner is an executive authority and not a judicial officer. The statute does not attempt to confer judicial status on the Commissioner; instead, it creates a legislative substitution for limited procedural purposes within the GST framework.

BNSS Perspective: Special Laws and Investigations

The BNSS itself reinforces this legislative choice. Section 2(1)(l) of the BNSS defines “investigation” broadly, but the Explanation to the provision clearly states that where any special law contains provisions inconsistent with the BNSS, the special law shall prevail. This is a statutory affirmation of the doctrine of lex specialis derogat legi generali, under which a special enactment overrides a general law in its specific domain. Given that the CGST Act is a special fiscal statute dealing exclusively with tax administration and enforcement, its provisions necessarily prevail over the BNSS in matters of GST search and seizure.

Consequently, the procedural requirements of the BNSS apply to GST searches only to the extent they are compatible with Section 67 and subject to the modifications expressly provided by Parliament. Search warrants under GST are administratively authorised, judicial oversight at the Magistrate level is replaced by Commissioner-level supervision, and post-search obligations are correspondingly adapted. This is not an accidental dilution of criminal procedure safeguards but a conscious legislative recalibration.

Is the Commissioner a “Magistrate” in Substance?

Concerns are often raised about whether the Commissioner can be regarded as a Magistrate in substance. Legally, the answer is clearly in the negative. The Commissioner does not exercise judicial powers, nor does the statute pretend otherwise.

The substitution is purely statutory. Constitutionally, courts have repeatedly upheld the validity of executive-authorised searches in economic and fiscal statutes, provided that the power is exercised on the basis of recorded “reason to believe,” is non-arbitrary, and is accompanied by adequate safeguards against abuse. The GST framework satisfies these requirements through written authorisations, documentation of searches, preparation of panchnamas and inventories, and the availability of judicial review under Article 226 of the Constitution.

This statutory design also explains why search records under GST are not required to be produced before a Magistrate. Under Section 165(5) of the CrPC, and its BNSS equivalent, search records are ordinarily required to be forwarded to a Magistrate. However, by virtue of Section 67(10) of the CGST Act, this requirement stands modified, and the obligation is to submit records to the Commissioner. This is neither a procedural lapse nor an omission; it is an express legislative substitution enacted by Parliament.

Recent allegations that GST searches are vitiated because seizure records were not placed before a Magistrate within BNSS timelines overlook several critical realities. First, the same procedure has been uniformly followed across all GST formations since the inception of the regime in 2017. Second, this procedure is expressly authorised by the CGST Act. Third, the BNSS itself recognises the overriding force of special statutes. To retrospectively fault officers for following a nationally consistent, statute-backed procedure would amount to unsettling settled law through reinterpretation rather than adjudication.

It is also argued that the GST search framework undermines the “spirit” of criminal procedure. While the concern is understandable, the spirit of criminal law lies in protecting individuals from arbitrary action, ensuring accountability of authorities, and maintaining transparency. These objectives are achieved under GST through the requirement of recorded reasons, controlled authorisation, detailed documentation, and constitutional remedies. The absence of Magistrate-level involvement at the search stage does not, by itself, violate due process, particularly in the context of regulatory and fiscal investigations.

Questions have also arisen regarding search warrants issued by Joint Commissioners. The legality of such authorisations depends on whether proper delegation has been made under Section 67 read with Section 5 of the CGST Act. Where valid delegation orders exist, the exercise of power is lawful. Any defect in delegation would ordinarily be administrative in nature and would not attract criminal consequences unless mala fides or abuse of power are clearly established.

In substance, there is no inherent conflict between the CGST Act and the BNSS in matters of search and seizure. The relationship between the two statutes is one of harmonisation through qualified incorporation and conscious modification. The CGST Act prevails as a special law, the Commissioner operates as a statutory substitute rather than a judicial authority, and long-standing GST practices remain legally defensible. The BNSS cannot be invoked to invalidate actions expressly authorised by Parliament. Ultimately, the debate is not about the dilution of rights but about balancing effective fiscal enforcement with procedural fairness—a balance that the GST framework consciously seeks to maintain.