The Uttarakhand High Court has held that no orders are permissible under omitted Rule 96(10) of Central Goods and Services Tax Rules, 2017 (CGST Rules) post 8 October, 2024.
The bench of Chief Justice Mr. G. Narendar and Justice Alok Mahra has observed that rule 96(10) of CGST Rule, 2017 being omitted unconditionally, without a saving clause in favour of the pending proceedings, all actions from the date of such omission of the rule must stop.
Rule 96(10) of CGST Rule, 2017 provides for a bar on availment of the refund of integrated tax (IGST) paid on export of goods or services, if benefits of certain concessional/exemption notifications, as specified in the sub-rule, have been availed on inputs/raw materials imported or procured domestically.
The petitioner/assessee is in the business of manufacturing Gold Bar & Jewellery etc., falling under Chapter 71 of the Central Excise Tariff Act, 1985.
The petitioner is registered with the GST Department. The petitioner is discharging tax liability under CGST Act, 2017, and UKGST Act, 2017 & IGST Act, 2017, as applicable.
The petitioner is also availing the facility of ITC on inward supplies of goods and supplies being used for providing outward supplies. The officers of the State Goods and Service Tax Department conducted an audit of the petitioner, wherein it appears that petitioner has claimed refund amounting to Rs.1,05,25,755/- under the head of IGST.
A show-cause notice was issued by the respondent department to the petitioner requiring him to show cause as to why alleged inadmissible/erroneous refund amounting to Rs.1,05,25,755 should not be demanded and recovered from him under Section 74 (1) of the CGST Act, 2017 read with Section 20 of the IGST Rules, 2017 along with Section 50 and penalty under Section 74(1) of the CGST Act, 2017 read with Section of the IGST Act, 2017.
The personal hearing in respect of the show-cause notice, was granted to the petitioner, after, he also filed a written submission. However, the respondent department without considering the submissions made by the petitioner, confirmed the demand of alleged inadmissible/erroneous refund amounting to Rs.1,05,25,755.
The assessee contended that although, a proceeding was initiated by the respondents within the validity of the said rules and show-cause notice in that regard was issued and served on the petitioner, however, before the final order came into existence, rule 96(10) of the rules stood omitted from the statute book. Once a rule is omitted, ordinarily the provision is to be obliterated from the statute book as completely as if it had never been passed, and the statute must be considered as if the rule had never existed.
The court held that there was no scope for the department to pass any order by invoking the provisions of rule 96(10) of CGST Rule, 2017 after it was omitted on 8th October, 2024 without a saving clause in favour of the pending proceeding.
The court while allowing the writ petition and set aside the order.
Case Details
Case Title: M/s Sri Sai Vishwas Polymers Versus Union of India and Another
Case No.: Writ Petition (MB) No. 103 of 2025
Date: 30.04.2025
Counsel For Petitioner: Bharat Raichandani
Counsel For Respondent: Saurav Adhikari
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