The Punjab and Haryana High Court has disposed of a batch of writ petitions concerning the legal consequences of the omission/repeal of Rules 89(4B) and 96(10) of the Central Goods and Services Tax Rules, 2017, holding that the controversy is squarely covered by the Bombay High Court’s judgment in Hikal Ltd. v. Union of India, reported as (2025) 34 Centax 249 (Bom.).
The bench of Acting Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor has observed that there was no reason to take a view different from the one already taken by the Bombay High Court in Hikal Ltd. The Court consequently disposed of the petitions in terms of that judgment.
The central issue before the Court was the effect of the omission/repeal of Rule 89(4B) and Rule 96(10) of the CGST Rules through a notification dated October 8, 2024.
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The dispute essentially concerned whether proceedings that were pending when the impugned provisions were omitted—including show cause notices, orders disposing of such notices and matters under challenge before appellate authorities or constitutional courts—could continue after the repeal.
The Bombay High Court in Hikal Ltd. had undertaken a comprehensive examination of the issue and concluded that, in the absence of an applicable saving clause or the protection available under Section 6 of the General Clauses Act, such pending proceedings would not survive merely because they had been initiated before the omission of the relevant Rules.
The Punjab and Haryana High Court expressly adopted this reasoning.
The Court recorded that counsel appearing for the parties were ad idem, meaning that there was agreement that the controversy stood answered by the Bombay High Court’s decision in Hikal Ltd. The High Court also noted that the Special Leave Petition filed against the Bombay High Court judgment before the Supreme Court—SLP (C) No. 24550 of 2025, along with connected matters—had also been dismissed.
This was significant because the Punjab and Haryana High Court was not called upon to independently re-examine the validity or effect of the repeal. Instead, it found that the legal position had already been authoritatively considered by the Bombay High Court and that the challenge to that judgment had failed before the Supreme Court.
The Bombay High Court’s reasoning, reproduced in the Punjab and Haryana High Court’s orders, is particularly important for taxpayers.
The Court held that following the omission or repeal of Rules 89(4B) and 96(10) through the notification dated October 8, 2024, and in the absence of a saving clause or the benefit of Section 6 of the General Clauses Act, pending proceedings such as undisposed show cause notices would not be preserved.
The principle was also extended to orders dealing with show cause notices issued after October 8, 2024, as well as orders made before that date which had not attained finality because appeals were pending before appellate authorities or challenges were pending before the High Court.
According to the finding reproduced in the Punjab and Haryana High Court order, such proceedings did not constitute “transactions past and closed” and therefore would lapse.
The Bombay High Court had also dealt with cases where refund applications had been rejected on the basis of the now-omitted provisions. The Court directed that such refund applications be restored to the files of the concerned authorities.
The authorities were then directed to reconsider and dispose of the refund applications in light of the legal position resulting from the omission and repeal of the Rules.
The Punjab and Haryana High Court reproduced this direction and adopted the same approach. The refund-related process is required to be completed within four months from the date of uploading of the High Court’s order, after giving the concerned petitioners a fair opportunity of being heard.
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