New Delhi: The Supreme Court has held that the omission of Rule 96(10) of the Central Goods and Services Tax Rules, 2017, with effect from 08.10.2024, inures to the benefit of assessees in proceedings pending as on the date of omission, entitling exporters to claim refund of integrated tax paid on exported goods and services without the restrictions that Rule 96(10) had imposed.
The Bench of Justices J.B. Pardiwala and K. Vinod Chandran was hearing a batch of appeals arising from a judgment of the High Court, which had held that the omission of Rule 96(10), effected through Notification No. 20/2024, applied to all proceedings pending on the date of omission. The Union of India and the GST Department had challenged this finding, while two assessees had filed separate Special Leave Petitions challenging the vires and validity of Rule 96(10) itself, a question the High Court had declined to examine since it had already ruled in the assessees' favour on the applicability point. Since the batch was being disposed of on the applicability issue, the Court dismissed the two vires-challenge petitions as infructuous and granted leave in the remaining matters.
Rule 96(10), prior to its omission, restricted the entitlement of exporters to claim refund of integrated tax paid on exports where they had received supplies availing the benefit of certain specified exemption notifications. The question before the Court was whether the omission of this restriction, made without any saving clause, would apply to refund claims that were pending as on the date of omission, or only prospectively.
Appearing for the Union of India, Additional Solicitor General S. Dwarakanath relied on the minutes of the 54th meeting of the GST Council held on 09.09.2024, which had recommended that Rule 96(10), along with Rules 89(4A) and 89(4B), be omitted with prospective effect, while fairly conceding that such a recommendation was only advisory and not binding on the rule-making authority.
Counsel for the assessees relied on the Constitution Bench decision in Kolhapur Canesugar Works Ltd v. Union of India, (2000) 2 SCC 536, which had held that the omission of a rule, unlike the repeal of a statute, obliterates it from the rule book as completely as if it had never existed, and that Section 6 of the General Clauses Act does not apply to save pending proceedings upon omission of a rule, since a rule is neither a Central Act nor a regulation within the meaning of that Act. Absent a saving clause or a legal fiction continuing proceedings under the omitted provision, the Constitution Bench had held, pending proceedings under an omitted rule could not survive the omission.
Applying this principle, the Court held that since the legislature had not incorporated any saving or sunset clause when Rule 96(10) was omitted, and since the GST Council's recommendation for prospective application was merely advisory, the omission would apply to pending proceedings as well.
"The intention to omit the rule without any saving clause was to bring to an end, the unnecessary complications once and for all and the intention cannot be to keep alive the unnecessary complications insofar as the pending proceedings are concerned."
Finding no reason to interfere with the High Court's judgment, the Court noted that similar proceedings were pending before various High Courts with conflicting decisions, and expressed the hope that its ruling would bring closure to such litigation.
The Registry was directed to send a copy of the order to all High Courts, with the respective High Court Registries to place pending matters on the subject before appropriate Benches, after obtaining orders from the Chief Justice concerned, for expeditious disposal.
The appeals filed by the Union of India were accordingly dismissed.
Case Title : M/s Goodluck India Limited & Anr. v. Union of India & Ors. [SLP(C) No. 24550 of 2025 and connected matters]
