Gauhati High Court Bars Coercive GST Recovery During Search, Directs Authorities To Follow Investigation Guidelines

The Gauhati High Court has directed GST authorities not to take coercive steps against a taxpayer for discharge of any liability during an ongoing search and directed them to adhere to the prescribed GST investigation guidelines till the returnable date.

Justice Manish Choudhury passed the order while hearing a writ petition filed by Deepak Construction Co., a partnership firm having its principal place of business at Hijuguri, Tinsukia, Assam.

The petitioner's principal place of business was searched by a team of State Tax officials pursuant to an authorisation dated September 15, 2026, issued in Form GST INS-01 under Section 67 of the CGST and AGST Acts.

The search commenced on the same day and was stated to be continuing when the matter came before the Court.

The petitioner claimed that the search had not resulted in any order of seizure or prohibition, but officials remained at its premises throughout the period, including business hours.

It alleged that officials were putting continuous pressure on it to discharge liability allegedly arising from wrongful availment of benefits while its GST registration was under suspension.

The petitioner relied on Instruction No. 01-2022-2023 [GST – Investigation] dated May 25, 2022, contending that directing it to discharge liability during the search was contrary to the guidelines.

The State opposed the allegation, stating that there were serious allegations of wrongful availment of benefits and contraventions of the CGST and AGST Acts.

It submitted that if the petitioner had not discharged any liability under the CGST or AGST Acts, the authorities would follow the statutory procedures for demand and recovery.

The Court directed that the petitioner be allowed to carry out its normal business activities.

It further ordered that there shall be no coercive steps against the petitioner for discharge of any liability during the inspection/search proceedings.

It also directed the authorities to adhere to the guidelines contained in Instruction No. 01-2022-2023 [GST – Investigation] dated May 25, 2022, till the returnable date.

“...there shall not be any coercive steps by the respondent authorities on the petitioner for discharge of any liability during the inspection / search proceeding and there shall be due adherence to the Guidelines laid in Instruction no. 01/2022-2023 [GST – Investigation] dated 25.05.2022 till the returnable date,” the Court ordered.

The matter is to be heard again on October 12, 2026.

For the Petitioner: Amit Goyal, A. Choudhury, Pranjal Saraogi, P. Borae, P. Jalan, Advocates.

For Respondent No. 1: S.S. Roy, Central Government Counsel.

For Respondent Nos. 2–7: B. Choudhury, Standing Counsel, Finance & Taxation Department, Government of Assam.

For Respondent No. 8: S. Chetia, Standing Counsel, CGST.