HC holds omission of Rule 96(10) is applicable to all pending proceedings - June 18, 2025

• The omission of Rule 96(10) cannot be considered curative or remedial, as it impacts the taxpayer’s substantive right to claim refund of IGST paid on export of goods where duty-free inputs are used. Hence, such omission cannot be said to apply retrospectively.
• If the omission of Rule 96(10) were intended to have retrospective effect, the Central Goods and Services Tax (Second Amendment) Rules, 2024 would have expressly stated so. Moreover, the GST Council has recommended the omission with prospective effect.
• The General Clauses Act, 1897, provides that the effect of repealing a statute is to obliterate it completely from the records of Parliament as if it had never been passed, except in relation to actions that were initiated, pursued, and concluded while the law was still in force.
• Omission of Rule 96(10) will amount to repeal without any saving clause. A repeal without a saving clause would nullify all proceedings, whether initiated or not or pending at the time of repeal unless they had already been concluded with a final judgment creating a vested right.
• Revenue’s argument that the present petitions challenging the validity of Rule 96(10) do not constitute pending proceedings is unfounded, as the petitioners have also challenged show cause notices and orders issued under Rule 96(10) rejecting their refund claims. The petitions clearly qualify as pending proceedings before the Court, which had not attained finality when Notification No. 20/2024 came into effect on 8 October 2024.

Accordingly, HC held that the omission of Rule 96(10) will be applicable to all pending proceedings/cases which are pending for final adjudication either before courts or adjudicating authorities.

The question of challenging the vires and validity of Rule 96(10) was not considered by the Court.