Abubakar Mines and Minerals Vs Additional Commissioner (AE) CGST (Bombay High Court)
Summary: The Bombay High Court, Circuit Bench at Kolhapur, allowed the writ petition filed by Abubakar Mines and Minerals seeking release of its goods whose continued detention and prohibition were challenged as contrary to Section 67(7) of the Central Goods and Services Tax Act, 2017. The Petitioner had challenged the continued detention and prohibition of its goods pursuant to an order dated 26 September 2024 and sought their immediate release. In the Affidavit-in-Reply dated 21 August 2026, the Respondent authorities stated that the prohibition order had been issued in Form GST INS-03 under Section 67(2) read with Rule 139(4) of the CGST Rules, 2017, and remained valid for the prescribed period. The Respondents further contended that the initial period was three months and, upon expiry of the extended period, the prohibition order automatically came to an end without any separate revocation order.
They also maintained that expiry of the prohibition order had no bearing on the legality of the departmental investigation or the evidentiary material collected during that investigation. The Court relied upon this position taken by the Respondents themselves and held that upon expiry of the extended period, the prohibition order automatically came to an end. Since the continued detention challenged by the Petitioner was alleged to be violative of Section 67(7), and the Respondents accepted that the prohibition ceased after the extended period of six months, the Court allowed the petition in terms of prayer clauses (a) and (b). The Court expressly clarified that permitting release of the goods would have no bearing on the legality of the departmental investigation or on evidential material collected during the investigation. The Petition was accordingly allowed, while the Interim Application did not survive and was disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. By the present petition, the Petitioner seeks a declaration that the continued detention and the prohibition on the Petitioner’s goods pursuant to the order dated 26th September 2024 is contrary to Section 67(7) of the Central Goods and Services Tax Act, 2017 (‘CGST Act’) and seeks a direction of forthwith release of the Petitioner’s goods.
2. The Respondent Nos.1 and 2 have iled Aidavit-in-Reply dated 21st August 2026 and has stated in paragraph No.6 as under:
“6. I further say and submit that after passing of prohibition order dated 26.09.2024 was issued in the Form GST INS-03 under section 67 (2) read with Rule 139 (4) of the CGST Rules 2017 remained valid for the period prescribed under Section 67 (7) as mentioned by the petitioner in para No.2 and 4 (a) of the petition is concern. I further say and submit that the initial Commissioner for a period of 3 months in accordance with law. Upon expiry of extended period, the prohibition order automatically came to an end, no separate order was required to revoke the said prohibition, however the petitioner seeks to portray the entire investigation as arbitrary merely because the prohibition order ceased to operate under Section 67 (7) of the Act. Such contention of the petitioner is wholly misconceived. The expiry of prohibition order has no bearing on the legality of the investigation conducted by the department or on evidentiary material collected during the course of such investigation.”
3. The above reproduced paragraph No.6 makes it clear that upon expiry of the extended period, the prohibition order automatically comes to an end. The relief, which is sought in the present petition, assailed the continued detention after the order of 26th September 2024, as violative of Section 67(7) of the CGST Act. As it is the Respondents’ own contention that the prohibition order comes to an end after the expiry of the extended period of six months, the petition is required to be allowed in terms of prayer clause (a) and (b).
4. It is clariied that the passing of the present order permitting the release of the goods in the petitioner’s favour, would have no bearing on the legality of the investigation conducted by the Department or on evidential material collected during the course of investigation.
5. The Petition is allowed in terms of prayer clause (a) and (b).
6. The Interim Application does not survive and stands disposed of.
