It was sent thru the GSP. The seller said in that case parcel shouldn't have been inspected by customs

I don't know why the seller is so naive as to think that would be correct. As mentioned above any and all parcels could be inspected by customs. 

There are customs inspections ( GST evaders if over $1000 etc) and Quarantine Inspections.. checking for imported restricted or prohibited items.. two different depts aren't they?

I am sure whoever inspected your parcel rejected it for a very good reason...it a was restricted or prohibited item.