Allahabad High Court asks GST authorities to give taxpayer a fair hearing, consider inquiry report before proceeding in search case

M/s Gospel Press took the department to court after getting a search authorisation in Form GST INS-01, dated 06.09.2025, under Section 67 of the UPGST Act, 2017. They said the authorisation was not legal basically; it got issued without any real “reason to believe”. They also asked the court to protect them from moves like freezing their Input Tax Credit or attaching assets. But the department was already a step ahead, starting proceedings under Section 74 and sending out summons. Gospel Press replied to those summons.

Issue

Was the department right to issue the search authorisation and start proceedings? And did Gospel Press actually get a fair shot to present their case before the department took more aggressive action?

Court Observation

The judges noticed that Section 74 proceedings were already rolling and Gospel Press had responded. They made it clear: the authorities have to give Gospel Press a real opportunity to be heard. On top of that, there was a preliminary inquiry report dated 18.02.2026 from the department, and the court said that has to be looked at carefully during the hearing.

Judgement

The court did not cancel the proceedings outright. Instead, it disposed of the petition, laying down some rules:

1. The authorities have to give Gospel Press a proper, fair hearing.
2. They need to fix a specific date for this and tell Gospel Press about it.
3.  While making any decision, they must consider what’s in the preliminary inquiry report.

Key highlight of the Judgement

The court said for the authorities to follow procedure and listen to both sides Before taking any Action and not act in haste.