Bombay High Court

ABUBAKAR MINES AND MINERALS THR. PROP. FAROOQ BAIGversusTHE ADDITIONAL COMMISSIONER (AE) CGST KOLHAPUR AND ANR

Disposal: Disposed Off

Holding

The Court held that the prohibition order under Section 67(2) automatically ended after the period prescribed in Section 67(7), rendering the continued detention unlawful, and therefore ordered the release of the goods.

Summary

The petitioner, Abubakar Mines and Minerals, sought a declaration that the continued detention of its goods following a prohibition order dated 26 September 2024 violated Section 67(7) of the Central Goods and Services Tax Act, 2017, and requested their immediate release. The respondents argued that, under Section 67(2) read with Rule 139(4) of the CGST Rules, the prohibition automatically lapses after the period prescribed in Section 67(7) (initial three months plus any extension up to six months) and that expiry does not affect the legality of the investigation. The Court examined the statutory language and accepted the respondents’ contention that the order ceases automatically, making any further detention unlawful. Consequently, the Court ordered the release of the goods, emphasizing that this relief does not impinge on the investigation or the evidentiary material gathered. The interim application was dismissed as it no longer survived.

Issues considered

Whether the continued detention of the petitioner's goods after the expiry of the period prescribed under Section 67(7) of the CGST Act is contrary to law
Whether a prohibition order under Section 67(2) automatically terminates after the prescribed period without a separate revocation order

Legislation cited

Central Goods and Services Tax Act, 2017 — s. 67(2), 67(7)
Central Goods and Services Tax Rules, 2017 — s. 139(4)

Subjects

CGST Act
Section 67
prohibition order
goods detention
writ petition
tax investigation
release of goods

Judgment

33-WP-1943-2026.doc

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIRCUIT BENCH AT KOLHAPUR
CIVIL APPELLATE JURISDICTION

WRIT PETITION NO. 1943 OF 2026
WITH
INTERIM APPLICATION NO. 1140 OF 2026

Abubakar Mines and Minerals ...Petitioner.
Versus
The Additional Commissioner (AE)
CGST, Kolhapur and Another ...Respondents.
——————
Mr. Kuldeep Kulkarni for the Petitioner.
Mr. Anand Kulkarni with mr. Shridhar Patil (Through VC) with Mr. Vaibhav
Kupawade, for the Respondent Nos.1 & 2.
——————
Coram : Sharmila U. Deshmukh &
Neeraj P. Dhote, JJ.
Date : September 02, 2026.
P. C. :

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 26 th 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

Gaikwad RD 1 of 3
33-WP-1943-2026.doc

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 26 th 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.

Gaikwad RD 2 of 3
33-WP-1943-2026.doc

5. The Petition is allowed in terms of prayer clause (a) and (b).

6. The Interim Application does not survive and stands disposed of.

[Neeraj P. Dhote, J.] [Sharmila U. Deshmukh, J.]

Digitally
signed by
RAJU
RAJU DATTATRAYA
DATTATRAYA GAIKWAD
GAIKWAD Date:
2026.09.02
20:57:59
+0530

Gaikwad RD 3 of 3

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