Bombay HC Orders Release of Goods After GST Prohibition Period Ends

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.