Rule 139 and the INS Forms: The Search and Seizure Procedure

Rule 139 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

The Act gives the powers; Rules 139 to 141 give the paperwork. Each form marks a step, and a missing form marks a step that did not happen properly.

INS-01 — the authorisation by a proper officer not below the rank of Joint Commissioner (Rule 139(1)). INS-02 — the order of seizure (Rule 139(2)). INS-03 — the order of prohibition, where seizure is not practicable (Rule 139(4)). INS-04 — the bond for provisional release, with a bank guarantee for tax, interest and penalty (Rule 140(1)). INS-05 — the order of release of perishable or hazardous goods on payment (Rule 141(1)). Plus, under Rule 139(5), an inventory of everything seized, signed by the person from whom it was seized.

The forms, step by step

Rule 139(1): the authorisation

The rule requires that where the proper officer not below the rank of a Joint Commissioner has reasons to believe that a place of business or any other place is to be visited for the purposes of inspection or search or seizure in accordance with s.67, he shall issue an authorisation in FORM GST INS-01 authorising any other officer subordinate to him to conduct the inspection or search or seizure of goods, documents, books or things liable to confiscation.

Three details worth reading closely:

• the authorisation names which of the three actions it permits;
• it authorises an officer subordinate to the authorising officer; and
• the seizure it contemplates is of things liable to confiscation.

Section 67(1) and the preconditions →

Rule 139(2) and (5): seizure and the inventory

Rule 139(2): where any goods, documents, books or things are liable for seizure under s.67(2), the proper officer or an authorised officer shall make an order of seizure in FORM GST INS-02.

Rule 139(5): the officer seizing shall prepare an inventory of the goods, documents, books or things containing, inter alia, description, quantity or unit, make, mark or model, where applicable, and get it signed by the person from whom the seizure was made.

The inventory is the taxpayer's most important document from the day.

• It fixes what was taken, which prevents later disputes about scope.
• It fixes the condition and quantity, which matters for goods.
• It is signed by the person from whom the seizure was made — so read it before signing, and record any disagreement on the document itself.
• Ask for a copy. Without one, the entitlement under s.67(5) to copies and extracts is hard to exercise, and the six-month clock in s.67(7) is hard to prove.

Rule 139(3): custody left with the owner

Rule 139(3) allows the officer to entrust the custody of seized goods or things to the owner or custodian from whom they were seized, for safe upkeep — the person then not to remove, part with, or otherwise deal with them except with the officer's previous permission.

This is a practical and under-used provision. Where the goods are bulky, perishable, or needed for storage reasons, custody with the owner avoids transport, warehousing charges and deterioration, while the legal seizure stands.

It is worth asking for, in writing, at the time.

Rule 139(4): the prohibition order

Where it is not practicable to seize the goods, an order of prohibition in FORM GST INS-03 may be served on the owner or custodian, directing that the goods not be removed, parted with or otherwise dealt with except with previous permission.

The statutory source is the first proviso to s.67(2).

Note what INS-03 is and is not. It restrains dealing; it does not transfer possession. The goods stay where they are, with the owner, subject to the restraint. That distinction matters for insurance, storage and for the running of the s.67(7) period.

Rule 140: provisional release

Rule 140(1): seized goods may be released on a provisional basis upon:

• execution of a bond for the value of the goods in FORM GST INS-04; and
• furnishing of a security in the form of a bank guarantee equivalent to the amount of applicable tax, interest and penalty payable.

The Explanation defines "applicable tax" as including central tax and State tax, or central tax and Union territory tax, and the cess, if any, under the GST (Compensation to States) Act, 2017.

Rule 140(2): if the person to whom goods were released provisionally fails to produce the goods at the appointed date and place, the security shall be encashed and adjusted against tax, interest, penalty and fine.

The commercial calculation is straightforward: a bank guarantee costs a commission and blocks a limit, but goods sitting in a departmental warehouse depreciate and may be unsellable by the time the dispute ends. Section 67(6) provisional release →

Rule 141: perishable and hazardous goods

Rule 141(1): where the goods or things seized are of a perishable or hazardous nature, and the taxable person pays an amount equivalent to the market price of the goods or the amount of tax, interest and penalty that is or may become payable, whichever is lower, the goods shall be released forthwith by an order in FORM GST INS-05, on proof of payment.

Rule 141(2): where the person fails to pay that amount, the proper officer may dispose of the goods, and the amount realised is adjusted against the tax, interest, penalty or other amount payable in respect of them. The words "proper officer" were substituted for "Commissioner" by Notification No. 16/2020-CT dated 23.03.2020.

Note the "whichever is lower" — for perishables of high value and low tax incidence, the tax-interest-penalty figure will often be the lower, and the release is correspondingly cheap. The provision must be invoked quickly, because its whole point is the nature of the goods.

Key takeaways

• INS-01 authorises; it must name the action and issue from a Joint Commissioner or above.
• INS-02 is the seizure order; Rule 139(5) requires a signed inventory with description, quantity, make and model.
• Rule 139(3) allows custody to remain with the owner — ask for it.
• INS-03 restrains dealing where seizure is not practicable; it does not take possession.
• INS-04 plus a bank guarantee for tax, interest and penalty releases goods provisionally.
• INS-05 releases perishable or hazardous goods on paying the lower of market price and tax-interest-penalty.

Read next

• Section 67(1): Inspection and the Reasons-to-Believe Test
• Section 67(6): Provisional Release of Seized Goods
• Section 67(7): Six Months and the Return of Seized Goods
• "Secreted": The Word That Decides a GST Search

Disclaimer: Positions stated as on 5 September 2026, based on the CGST Rules as amended to 31 March 2026 (ICAI Bare Law, 12th edition) and the ICAI Handbook on Inspection, Search, Seizure and Arrest under GST (July 2025).