TaxTMI 
TaxTMI 
TaxTMI 
Despite clear legal position that no power vest with GST officials to seize cash from business premises during inspection or based on inspection, the GST officials do not listen to earlier high court rulings on identical issues and assume that they have super powers and the GST provisions are not binding on them. The division bench of the Bombay High Court had an occasion to deal this issue on 10/03/2026 and the order passed is furnished for use by all GST officials so as to ensure that this happens to be the last case on seizure of cash.
ORDER
Impugned seizure order dated 28th June 2023 issued in Form GST INS-02 by Respondent No. 3 seizing cash amounting to INR 60 Lakhs and impugned order of seizure dated 27th June 2023 issued in Form GST INS-02 by Respondent No. 2 seizing cash amounting to INR 40 Lakhs, is hereby quashed and set aside.
b. Respondent Nos. 2 and 3 to forthwith release the aforesaid amounts and pay the same directly to the Petitioner in the bank account as provided by her to the Respondents,along with the applicable interest within a period of two weeks from the date this order is made available to the Respondents by the Petitioner.
c. Petition is disposed of in the above terms. No costs.
Kindly refer to writ petition number 839 of 2025 in the matter of Smurti Waghdhare Versus Joint Director Directorate General of GST Intelligence, Mumbai, Senior Intelligence Officer Directorate General of GST Intelligence, Mumbai, Intelligence Officer Directorate General of GST Intelligence, Mumbai-2026 (3) TMI 582 - BOMBAY HIGH COURT
There is no purpose being served when the registration of a taxpayer is cancelled under GST. Despite the fact that at least 90 % of the taxpayers want peace and do not intend to avoid payment of any tax which is legally payable, GST officials often resort to cancellation of registration which leads to uncomfortable position for all. It is the fundamental right of a citizen to do business in India as provided under the constitution so long as the business is done with due permissions and in a legal manner by complying with tax laws. We come across a minimum of 10 cases of cancellation of registration all over India. One such case came before the division bench of the Bombay High Court on 11/03/2026 in the matter of Bi-Chem India Private Limited Versus Union of India - 2026 (3) TMI 729 - BOMBAY HIGH COURT.
The operative portion reads as '6. In these circumstances, further adjudication of the matter is not called for. The Petition is accordingly disposed of in terms of the following order:
i) The statement made on behalf of the Respondent-Revenue that the impugned suspension of the Petitioner's registration stands withdrawn, isaccepted.
ii) As a consequence of the aforesaid statement, the registration of the Petitioner shall forthwith stand restored.
Iii) The Petitioner shall be granted an opportunity of hearing on the Show Cause Notice dated 18th February 2026'.
Thus it is expected that GST officials all over India may not resort to cancellation of registration from today onwards as a matter of routine and may resort to the last step only in rarest of the rare cases when other measures on recovery fails.
Do not issue show cause notice on a person before ensuring that the registered person on whom SCN is proposed to be issued is alive as on the date of issuance of SCN to avoid legal complications. One SCN was issued on a deceased person and the division bench of Bombay High Court on 04/03/2026 { Vinay Hiroo Thadani Versus Deputy Commissioner of CGST and Central Excise & Ors. - 2026 (3) TMI 402 - BOMBAY HIGH COURT } handled the matter appropriately in para 6 of the order which is reproduced.
6. We have perused the record. Having heard learned Counsel for the parties, considering the peculiar facts and circumstances of the case, and more particularly when a demand, raised against the Petitioner being contended to be of the Petitioner's deceased father, we are of the opinion that the Petitioner be granted another opportunity of a hearing by the Deputy Commissioner, Division-III, CGST & Central Excise Mumbai West Commissionerate, on all contentions, the Petitioner would intend to raise. After the Petitioner is heard on all such contentions, a fresh order be passed on the show cause notice in question. If the Petitioner requires any documents in relation to the show cause notice, the same be furnished to the Petitioner on a specific application made to that effect.
Let us hope that there are no more show cause notices in future on deceased persons.
Clause c of sub section 2 of Section 16 of the CGST is mostly misused. The legal position is clear based on several high court decisions that when the transactions are genuine, buyer is not responsible for the default of the seller. This is more so when the buyer proves the payment of consideration as well as GST to the supplier through banking channel within 180 days. However, the GST officials often deny ITC on a genuine transaction which is totally unwarranted. The only beneficiary of these activities are tax professionals and the losers are taxpayer, tax official as well as no purpose is solved when order is set aside and taxpayer has to spend time, effort as well as money on litigation. Kindly refer to Kindly refer to M/s. Sahil Enterprises Versus Union of India, through its Secretary, Government of India, Ministry of Finance, Department of Revenue, New Delhi., Commissioner, Central Goods & Services Tax, Tripura Assistant Commissioner, Tripura M/s. Sentu Dey, Represented by its Proprietor Sri Sentu Dey, Bairagi Bazar, Jumerdhepha. - 2026 (1) TMI 385 - TRIPURA HIGH COURT.
Thus it is expected that there are no more adverse orders on genuine buyers from today onwards.
Kindly ensure that amount of demand raised in OIO do not exceed that of SCN. As per section 75 (7), no fresh issue is to be considered which is not alleged in SCN. In one case, the demand confirmed far exceeded the SCN amount and the high court in para 5, set aside the order as below:
The impugned order is thus contrary to Section 75 (7) of the respective GST Enactments and therefore, the impugned order is set aside and the case is remitted back to the Respondent to pass a fresh order on merits and in accordance with law.
Thus it is expected that GST officials all over India take note of strict compliance of 75 (7) and do not pass any order in violation of the above provision from today onwards.
It is concluded by stating that as GSTAT is operational now, the tax officials exercise extreme cautions in dealing the above five issues as, they are expected to pass orders which stand the test of law. By issuing an order which is liable to be set aside by the competent authority at a later date, the official passing such order declares the entire country that the order passed by the concerned officer is INCORRECT ONE.