Form No.J(2)

IN THE HIGH COURT AT CALCUTTA

CONSTITUTIONAL WRIT JURISDICTION

APPELLATE SIDE

Present :

The Hon’ble Justice Raja Basu Chowdhury

WPA 13772 of 2025

Techno Waxchem Private Limited

Versus

Union of India & Ors.

For the petitioner : Mr. Vinay Kumar Shraff

Mr. Harsh Gadodia

Mr. Dev Kumar Agarwal

For the Union of India : Mr. Partha Sarathi Banerjee

For the CGST authorities : Mr. Bhaskar Prosad Banerjee

Mr. Tapan Bhanja

For the State : Mr. Tanoy Chakraborty

Mr. Saptak Sanyal

Heard on : 16.01.2026, 06.02.2026 & 13.02.2026

Judgment on : 22

nd

May, 2026.

Raja Basu Chowdhury, J:

1. Challenging, inter alia, the order in original dated 4

th February,

2025 issued under Section 74(9) of the CGST Act, 2017 (hereinafter

referred as the “said Act”) and the demands raised by the

respondents in form GST DRC-07 all dated 5

th

February, 2025

along with the summary of the orders for the tax periods April 2018

to March 2019, April 2019 to March 2020, April 2020 to March

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2021 and April 2021 to March 2022, the above writ petition has

been filed.

2. The petitioner claims to be a private limited company registered

under the provisions of the Companies Act, 1956 and is also a

registered tax payer under the said Act.

3. The petitioner claims to be primarily engaged in the business of

manufacturing and exporting of various chemical products

predominantly used in the rubber industry. In order to carry out

the manufacturing process, the petitioner procures a wide range of

inputs, including but not limited to Resorcinol, Stearic Acid,

Formaldehyde, Phenol (PTBP), Hexamine, Palm Oil Fatty Acids, Zinc

Oxide, Styrene, etc. The above inputs are procured both through

domestic purchases as also by way of import from international

suppliers, depending upon the availability and cost efficiency.

4. According to the petitioner, among the various inputs, Resorcinol is

a critical input utilized in the manufacturing process. The

procurement whereof is made through import under Advance

Authorisation Scheme, which allows duty free import of inputs that

are used in the manufacturing of export goods. According to the

petitioner, Resorcinol is procured from two major sources, namely,

Japan and China. It is while importing from China that the

petitioner uses the Advance Authorisation license. According to the

petitioner, the inputs procured both domestically and through

imports from international markets, as mentioned above, are

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utilized in the manufacturing process to produce the following final

products:

Sl. No. Technical Name Final Product Name

1 Technic – KR140 Modified Formaldehyde Resin

2 Technic – OSCH Oil Silica Coated Hexamine

3 Technic – RSB-II Resorcinol & Silica Blend

4 Technic – RSAM Resorcinol & Stearic Acid Melt

5 Technic – B-18S/B-

19S/B-20S

Resorcinol Formaldehyde Resin

5. The petitioner contends that in the manufacturing of final products

listed under serial no. 3 to 5 of the table above, multiple inputs are

utilized apart from Resorcinol, including but not limited to Stearic

Acid, Formaldehyde, Phenol (PTBP), Hexamine etc.

6. With effect from 1

st

July, 2017, Goods and Service Tax (GST) regime

was introduced and had been implemented by making necessary

amendment in the Customs Act, 1962 and the Customs Tariff Act,

1975 as well. Consequentially, with effect from 1

st

July, 2017

instead of levying and collecting additional duty of customs equal to

the duty of excise chargeable on similar goods produced or

manufactured in India, Integrated Goods and Services Tax (IGST)

came to be levied on imported goods, whereas the goods cleared for

export were deemed to be transactions in the nature of inter-state

supply of goods under the Integrated Goods and Services Tax Act,

2017 (in short the “IGST Act”), and therefore, IGST was levied and

collected on the goods exported to the foreign countries. Originally,

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the rebate i.e. refund of excise duties paid on exported goods was

allowed under Rule 18 of the CENVAT Excise Rules, 2002 prior to

1

st

July, 2017. Subsequently in the GST regime, the IGST Act has

also incorporated identical provisions, for refund of tax in Section

16 of the IGST Act, 2017. The goods or services which are exported

by the petitioner are not subjected to IGST as they are treated as

“zero rated supply” under Section 16 of the IGST Act, 2017. Section

16 of the said IGST Act provides that a registered person making

zero rated supply shall be eligible to claim refund under either of

the conditions prescribed in sub-section (3) thereof i.e. (a) supply of

goods or services under bond or Letter of Undertaking without

payment of integrated tax and claim refund of unutilized Integrated

Tax Credit or, (b) supply of goods or services on payment of

Integrated Tax and claim refund of such tax paid., which has since

been deleted with effect from 1

st October 2023.

7. To claim the refund/rebate under Section 16 of the IGST Act,

provisions of Section 54 of the said Act, were made applicable and

the procedure prescribed in the CGST Rules, 2017 (hereinafter

referred to as the “said Rules”) which are applicable for refund

under Section 54 of the said Act are therefore, prescribed for

availing refund under Section 16 of the IGST Act.

8. Now, Explanation 1 to Section 54 of the said Act provides that

“refund” includes refund of tax paid on zero rated supply of goods

or services or both or on inputs or input services used in making

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such zero rated supplies or refund of tax paid on the supply of

goods regarded as deemed exports, or refund of unutilized input tax

credit as provided under Section 54(3) of the said Act.

9. Section 54(3) provides that subject to the provisions of sub-section

(10) a registered person can claim refund of unutilized input tax

credit however, the proviso to the said sub-section provides that no

refund of unutilized input tax credit shall be allowed in cases other

than (i) zero rated supplies made without payment of tax or (ii)

where the credit has accumulated on account of rate of tax on

inputs being higher than the rate of tax on output supplies (other

than nil rated or fully exempted supplies), except supplies of goods

or services or both as may be notified by the Government on the

recommendations of the Council. It is also provided that no refund

of unutilized input tax credit shall be allowed in cases where the

goods exported out of India are subjected to export duty; and that

no refund of input tax credit shall be allowed, if supplier of goods or

services or both avail of drawback in respect of central tax or

claims, refund of integrated tax paid on such supplies.

10. It appears that Rule 96 of the said Rules has been framed to deal

with refund of IGST paid on goods and services exported out of

India for entitlement of refund under Section 54(3) of the said Act,

whereas Rule 89 has been framed to deal with refund of unutilized

input tax credit used in goods and services exported out of India

without payment of tax. According to the respondents, the

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petitioner had availed refund of IGST to the tune of Rs.

6,28,27,407/- by exporting its finished goods under 15 several

Advance Authorisation licenses against payment of IGST though, at

the time of importing their inputs they did not pay IGST on

imported goods, by availing various exemption notifications and

thereby contravened various provisions of Rule 96(10) of the said

Rules. Since, the issue pertains to availing benefit of refund of IGST

and since Rule 96(10) of the said Rules has been allegedly

contravened; the relevant CGST Rule is extracted hereinbelow:-

“96. Refund of integrated tax paid on goods or services exported

out of India.—(1) The shipping bill filed by an exporter of goods

shall be deemed to be an application for refund of integrated tax

paid on the goods exported out of India and such application shall

be deemed to have been filed only when:

(a) the person in charge of the conveyance carrying the export

goods duly files a departure manifest or an export manifest or an

export report covering the number and the date of shipping bills or

bills of export; and

(b) the applicant has furnished a valid return in form GSTR-3 or

form GSTR-3B, as the case may be;…

xxx xxx xxx

(10) The persons claiming refund of integrated tax paid on exports

of goods or services should not have—

(a) received supplies on which the benefit of the Government of

India, Ministry of Finance Notification No. 48/2017-Central Tax,

dated the October 18, 2017, published in the Gazette of India,

Extraordinary, Part II, section 3, sub-section (i), vide number G.S. R

1305(E), dated the October 18, 2017 except so far it relates to

receipt of capital goods by such person against Export Promotion

Capital Goods Scheme or Notification No. 40/2017-Central Tax

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(Rate), dated the October 23, 2017, published in the Gazette of

India, Extraordinary, Part II, section 3, sub-section (i), vide number

G.S. R 1320(E), dated the October 23, 2017 or Notification No.

41/2017- Integrated Tax (Rate), dated the October 23, 2017,

published in the Gazette of India, Extraordinary, Part II, section 3,

sub-section (i), vide number G.S. R 1321(E), dated the October 23,

2017 has been availed; or

(b) availed the benefit under Notification No. 78/2017-Customs,

dated the October 13, 2017, published in the Gazette of India,

Extraordinary, Part II, section 3, sub-section (i), vide number G.S. R

1272(E), dated the October 13, 2017 or Notification No. 79/2017-

Customs, dated the October 13, 2017, published in the Gazette of

India, Extraordinary, Part II, section 3, sub-section (i), vide number

G.S. R 1299(E), dated the October 13, 2017 except so far it relates

to receipt of capital goods by such person against Export Promotion

Capital Goods Scheme.”

11. As would appear from the above, Rule 96 of the said Rules falls

under Chapter X, ‘Refund’ and deals with the refund of Integrated

Tax paid on goods or services exported out of India. Sub-rule (1) to

Sub-rule (9) of Rule 96 of the said Rules prescribe the procedure for

filing of the shipping bills, returns and other forms to avail the

refund of IGST paid under Section 16(3)(b) of the IGST Act.

12. Sub-rule (10) of Rule 96 of the said Rules was inserted for the

first time by Notification No. 75/2017 dated 29

th

December, 2017

with effect from 23

rd October, 2017. Subsequently, by Notification

No. 3/2018 dated 23

rd January, 2018 sub-rule (10) was amended

with effect from 23

rd

October, 2017. By Notification No. 39/2018

dated 4

th September, 2018 with effect from 23

rd October, 2017 the

Rule 96(10) was further amended wherein the restrictions were

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WPA 13772 of 2025

made applicable to cases where exporter himself has availed of the

benefit of duty free procurement under Notification No. 78/2017-

Customs dated 13

th

October, 2017 and Notification No. 79/2017 –

Customs dated 13

th October, 2017 which provide for duty free

imports of inputs capital goods by AA, EOU and EPCG license

holders However, this position was altered by Notification

No.53/2018-Central Tax, dated 9

th

October, 2018 whereby Rule

96(10) was once again substituted with effect from 23

rd October,

2017 and the position of the Rule prior to the amendment of

Notification No.39/2018 dated 4

th

September, 2018 was restored.

13. Still later, by Notification No. 54/2018 Rule 96(10) of the said

Rules was substituted with effect from 9

th

October, 2018 on the

following terms:-

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14. Again by Notification No. 16/2020 dated 23

rd

March, 2020 an

explanation was inserted in Rule 96(10) with effect from 23

rd

October, 2017, which provided that where IGST and Compensation

Cess has been paid on procurement of inputs under Notification No.

78/2017-Customs dated 13

th October, 2017 or Notification

No.79/2017-Customs dated 13

th October, 2017 and exemption has

been availed in respect of basic Customs duty (BCD) only, such

procurements would not be considered to have been procured by

availing the benefit of the said notifications. The said notification

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was issued as per the recommendations of the GST council in its

39

th meeting held on 14

th March, 2020.

15. According to the petitioner, the GST council in the 54

th

meeting

agreed with the recommendations of the law committee to ommit

Rule 96(10), Rule 89(4A), Rule 89(4B) and for the consequential

amendment in clause(b) of sub-rule (4B) of Rule 86, Clause-B,

Clause-C and Clause-E of sub-rule (4) of Rule 89, and explanation

(a) to sub-rule (5) of Rule 89 of CGST Rules 2017 along with

proposed circular.

16. Following the above on the basis of the recommendations as

above, the Government issued the Notification No. 20/2024 dated

8

th

October, 2024 deleting sub-rule (10) of Rule 96 of CGST Rule,

2017. The relevant part of the notification is extracted hereinbelow:-

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17. According to the petitioner, the petitioner had during the period

from October 2017 to March 2022 applied and availed refund of

IGST amounting to Rs.6,28,27,407/-. The refund corresponds to

the IGST paid during exports, as substantiated by the shipping bills

duly reflected in the ICEGATE portal, thereby validating the refund

claims and compliance with the export regulations.

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18. The petitioner further contends that by several letters dated 9

th

July, 2021, 9

th December, 2022, 4

th December, 2022 and 31

st

March, 2022 the department alleged that the petitioner had availed

double benefit by way of encashment of accumulated ITC and

accordingly, the petitioner had been directed to submit certain

documents to the department which included Advance

Authorisation Licenses as referred by DRI along with copy of the

shipping bills, export invoices, GST Returns for the related financial

period. The petitioner claims that petitioner duly responded to the

same.

19. According to the petitioner, notwithstanding the above response,

two several summons were issued by the DGGI under Section 70 of

the CGST Act, 2017 directing the petitioner to appear before the

Senior Intelligence Officer. Following the above and despite

submission of requisite documents, the respondent no.2 initially

issued a notice in Form GST DRC-01A advising the petitioner to

repay an amount of Rs.6,28,27,407. Before the petitioner could

formally respond to the same, and despite the petitioner seeking an

extension, the show-cause notice for the period 2017-18 to 2021-22

dated 27

th

September, 2023 was issued under Section 74 of the

said Act alleging that the petitioner had availed inadmissible refund

of IGST against shipping bills in contravention of the provisions of

Rule 96(10) of the said Rules read with Notification 54/2018-CT

dated 9

th October, 2018.

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20. The petitioner had furnished a detailed reply to the above show-

cause. The petitioner was given a personal hearing. In course of

such hearing, the petitioner’s representative apart from reiterating

its stand had clarified that the subsequent development in the form

of the Notification No. 20/2024-Central Tax, dated 8

th October,

2024 whereby Rule 96(10) of the said rules having been deleted

with effect from 8

th

October, 2024, the demand could not survive.

According to the petitioner, once, a rule is deleted/omitted, the

same is deemed to have been removed from the statute book and

the same is treated to have never existed. The petitioner submits

that by ignoring the above, the determination has been made. The

determination apart from being per se illegal is dehors the statute

and without jurisdiction. The foundation for issuing the show-cause

is Rule 96(10) which had been removed from the statute book

before the determination under Section 74(9) of the said Act had

been made. In support of his contention, that once, a rule is

omitted ordinarily as a consequence thereof, the provision is set 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, reliance has been placed on the judgment delivered in

the case of Rayala Corporation (P) Ltd. and M.R. Pratap v.

Director of Enforcement, New Delhi , reported in (1969) 2 SCC

412 and Kolhapur Canesugar Works Ltd. v. Union of India ,

reported in 2000 (119) E.L.T. 257 (S.C.).

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21. Independent of the above, reliance has also been placed on the

judgment delivered in the case of Addwrap Packaging (P.) Ltd. v.

Union of India, reported in [2025] 175 taxmann.com 592

(Gujarat)., and the judgment delivered in the case of Hikal Limited

v. Union of India, reported in 2025 SCC Online Bom 3169 to

contends that the provisions of the Amending Act do not include

any saving clause to protect pending proceedings resulting from the

omission of the IGST Rules. According to the petitioner, the

proceedings are deemed to have been closed upon Rule 96(10) of

the said Rules being omitted.

22. The respondents are represented, it has been the respondents’

case that the proceedings had been initiated against the petitioner

for recovery of a sum of Rs. Rs.6,28,27,407/- which amount the

petitioner had wrongfully taken refund of, by availing the benefit of

automatic refund of GST. Such refund according to the respondents

was obtained in contravention of the provisions of Rule 96(10) of the

said Rules. The refund was availed during the subsistence of the

Rules and the show-cause was also issued during the subsistence

of the rules. Though the Rule has been omitted by the notification

dated 8

th

October, 2024, the omission of Rule 89(4B) and Rule

96(10) has not been made retrospective. Consequentially, there is

no irregularity in passing the order.

23. Heard the learned advocates for the respective parties and

considered the materials on record. From the sequence of events

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narrated hereinabove, it is apparent and clear that the petitioner is

a registered tax payer and is otherwise bound by the provisions of

the said Act. It is also not in dispute that the petitioner between

October 2017 and March 2022 had availed a refund of IGST

amounting to Rs. 6,28,27,407/-. This according to the petitioner,

corresponds to IGST paid during exports as substantiated by

shipping bills reflected in ICEGATE portal which validates the

refund claims. It is also not in dispute that the provisions of Section

96(10) as amended was in subsistence when the show-cause cum

demand notice was issued.

24. As would appear from the show-cause notice, the petitioner’s

director had admitted that the petitioner was unaware of the law

and due to wrong interpretation of law had enjoyed undue benefit

by availing exemption of IGST on imported goods in one hand and

on the other hand, they had encashed the accumulated ITC

accrued on account of other goods and services procured

indigenously by paying for IGST suo moto for the purpose of the

export though, export being zero rated supply, which is contrary to

provisions of Rule 96(10). Thus, proceeding fundamentally around

non-compliance of Rule 96(10) of the said Rules, the demand was

calculated. The petitioner had duly responded to the show-cause

and was also afforded a personal hearing. In the operative portion of

the order, the Proper Officer has inter alia, pleased to observe as

follows:-

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25. From the above, it is clear that the entire proceeding proceeds on

the contravention of Rule 96(10) of the said Rules. I find that in the

instant case, the petitioner has despite raising the question of

constitutional validity of Rule 96 did not insist for the same, since

the GST council during the 54

th meeting had recommended

omission of Rule 96(10) of the said Rules prospectively along with

other rules and accordingly the Notification dated 8

th

October, 2024

was issued omitting Rule 96(10), no proceedings could have been

continued on the basis of contravention of such Rule. Even if, any

proceeding had been continued before the omission of such rule, on

the omission of the rule, all such proceedings came to an end and

stood closed.

26. In this context, I may note that to understand the argument of

the petitioner, it would be relevant to consider the effect of the

notification dated 8

th October, 2024 whereunder Rule 96(10) has

stood omitted. I may find that the Hon’ble Supreme Court in the

case of Rayala Corporation (P) Ltd. and M.R. Pratap (supra) in

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no uncertain terms while considering a challenge made to a charge

arising out of contravention of Rule 132-A(2) of the Defence of India

Rules, 1962 (hereinafter referred to as the “DIR Rules”), on the

ground that subsequent to omission of the relevant Rule, no charge

could be pressed, by noting the factum of the notification of the

Ministry of Home Affairs dated 30

th

March, 1965 (whereby offences

punishable under the said Rules) whereby the said Rule 132-A of

the DIR Rules relating to prohibition of dealing in foreign exchange

was omitted, and also noting that though that Section 4 of the

Foreign Exchange Regulation Act 1947 (in short, the “FERA”) having

been amended, legislature did not make any provision that an

offence previously committed under Rule 132A of the DRI Rules

would continue to remain punishable as an offence of contravention

of Section 4(1) of FERA, had held that after omission of Rule 132-A

of the DRI Rules, no prosecution could be instituted even in respect

of an act which was an offence when the rule was in force. The

other aspect as regards the applicability of Section 6 of the General

Clauses Act, 1897 was also considered in the above case wherein

the Hon’ble Supreme Court in paragraphs 17 and 18 had been,

inter alia, pleased to observe as follows:-

“17. Reference was next made to a decision of the Madhya

Pradesh High Court in State of M.P. v. Hiralal Sutwala [1958 SCC

OnLine MP 149 : AIR 1959 MP 93] but, there again, the accused

was sought to be prosecuted for an offence punishable under an

Act on the repeal of which Section 6 of the General Clauses Act

had been made applicable. In the case before us, Section 6 of the

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General Clauses Act cannot obviously apply on the omission of

Rule 132-A of the DIRs for the two obvious reasons that Section 6

only applies to repeals and not to omissions, and applies when

the repeal is of a Central Act or Regulation and not of a rule. If

Section 6 of the General Clauses Act had been applied, no doubt

this complaint against the two accused for the offence punishable

under Rule 132-A of the DIRs could have been instituted even

after the repeal of that rule.

18. The last case relied upon is J.K. Gas Plant Mfg. Co.,

(Rampur) Ltd. v. R. [1947 SCC OnLine FC 8 : (1947) 9 FCR 141] .

In that case, the Federal Court had to deal with the effect of sub-

section (4) of Section 1 of the Defence of India Act, 1939 and the

Ordinance 12 of 1946, which were also considered by the

Allahabad High Court in the case of Seth Jugmendar Das. After

quoting the amended sub-section (4) of Section 1 of the Defence of

India Act, the Court held:

“The express insertion of these saving clauses was no doubt

due to a belated realisation that the provisions of Section 6 of

the General Clauses Act (10 of 1897), apply only to repealed

statutes and not to expiring statutes, and that the general rule

in regard to the expiration of a temporary statute is that unless

it contains some special provision to the contrary, after a

temporary Act has expired, no proceedings can be taken upon it

and it ceases to have any further effect. Therefore, offences

committed against temporary Acts must be prosecuted and

punished before the Act expires and as soon as the Act expires

any proceedings which are being taken against a person will

ipso facto terminate.”

The Court cited with approval the decision in the case

of Wicks v. Director of Public Prosecutions, and held that, in view

of Section 1(4) of the Defence of India Act, 1939, as amended by

Ordinance 12 of 1946, the prosecution for a conviction for an

offence committed when the Defence of India Act was in force,

was valid even after the Defence of India Act had ceased to be in

force. That case is, however, distinguishable from the case before

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us in two respects. In that case, the prosecution had been started

before the Defence of India Act ceased to be in force and,

secondly, the language introduced in the amended sub-section (4)

of Section 1 of the Act had the effect of making applicable the

principles laid down in Section 6 of the General Clauses Act, so

that a legal proceeding could be instituted even after the repeal of

the Act in respect of an offence committed during the time when

the Act was in force. As we have indicated earlier, the notification

of the Ministry of Home Affairs omitting Rule 132-A of the DIRs did

not make any such provision similar to that contained in Section 6

of the General Clauses Act. Consequently, it is clear that, after the

omission of Rule 132-A of the DIRs, no prosecution could be

instituted even in respect of an act which was an offence when

that rule was in force.”

27. Again, in the case of Kolhapur Canesugar Works Ltd. (supra)

the Hon’ble Supreme Court while considering the scope of omission

of Rule 10 and 10A of the Central Excise Rules, 1944 with effect

from 6

th October, 1977 had observed that General Clauses Act is

only applicable to a Central Act or Regulation. The same applies

only to the repeal of an Act and not to the omission of the Rule. To

morefully appreciate the same paragraphs 32, 33 and 34 are

extracted hereinbelow:-

32. We have carefully considered the decisions in Saurashtra

Cement and Chemical Industries [(1993) 42 ECC 126 (Guj) (FB)]

and Falcon Tyres case [(1992) 60 ELT 116 (Kant)] . Though the

judgments in these cases were rendered after the decision of the

Constitution Bench in Rayala Corpn. (P) Ltd. [(1969) 2 SCC 412 :

(1970) 1 SCR 639] a different view has been taken by the High

Courts for the reasons stated in the judgments. The Full Bench of

the Gujarat High Court in Saurashtra Cement and Chemical

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Industries [(1993) 42 ECC 126 (Guj) (FB)] as it appears from the

discussions in the judgment, tried to distinguish the decision of the

Constitution Bench in Rayala Corpn. [(1969) 2 SCC 412 : (1970) 1

SCR 639] for reasons, we are constrained to say, not sound in law.

The decision of the Constitution Bench is directly on the question of

applicability of Section 6 of the General Clauses Act in a case

where a rule is deleted or omitted by a notification and the

question was answered in the negative. The Constitution Bench

said that

“Section 6 only applies to repeals and not to omissions, and

applies when the repeal is of a Central Act or regulation and not of

a rule” (p. 424, para 17 of SCC : p. 656 of SCR).

33. The Full Bench appears to have lost sight of the position that

all the relevant terms i.e. “Central Act”, “enactment”, “regulation”

and “rule” are defined in Sections 3(7), 3(19), 3(50) and 3(51)

respectively of the General Clauses Act. When the term Central Act

or regulation or rule is used in that Act reference has to be made to

the definition of that term in the statute. It is not possible nor

permissible to give a meaning to any of the terms different from the

definition. It is manifest that each term has a distinct and separate

meaning attributed to it for the purpose of the Act. Therefore, when

the question to be considered is whether a particular provision of

the Act applies in a case then the clear and unambiguous language

of that provision has to be given its true meaning and import. The

Full Bench has equated a “rule” with “statute”. In our considered

view this is impermissible in view of the specific provisions in the

Act. When the legislature by clear and unambiguous language has

extended the provision of Section 6 to cases of repeal of a “Central

Act” or “regulation”, it is not possible to apply the provision to a

case of repeal of a “rule”. The position will not be different even if

the rule has been framed by virtue of the power vested under an

enactment; it remains a “rule” and takes its colour from the

definition of the term in the Act (the General Clauses Act). At the

cost of repetition we may say that the omissions in the judgment

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in Rayala Corpn. [(1969) 2 SCC 412 : (1970) 1 SCR 639] pointed

out in para 17 of the judgment of the Full Bench have no substance

as they are not relevant for determination of the question raised for

the reasons stated herein.

34. In para 21 of the judgment the Full Bench has noted the

decision of a Constitution Bench of this Court in Chief Inspector of

Mines v. Karam Chand Thapar [AIR 1961 SC 838] and has relied

upon the principles laid down therein. The Full Bench overlooked

the position that that was a case under Section 24 of the General

Clauses Act which makes provision for continuation of orders,

notification, scheme, rule, form or bye-law, issued under the

repealed Act or regulation under an Act after its repeal and re-

enactment. In that case Section 6 did not come up for

consideration. Therefore the ratio of that case is not applicable to

the present case. With respect we agree with the principles laid

down by the Constitution Bench in Rayala Corpn. case [(1969) 2

SCC 412 : (1970) 1 SCR 639] . In our considered view the ratio of

the said decision squarely applies to the case on hand.”

28. In this context, I may note that in the judgement of the Bombay

High Court in the case of Hikal Limited (supra), an identical

question fell for consideration where the Hon’ble Bombay High

Court in paragraph 122 thereof by noting the absence of the saving

clause was pleased to, inter alia, return the following finding which

is extracted hereinbelow:-

“122. Upon comprehensive review of all the above

aspects, we hold that, following the omission or repeal of

the impugned Rules, i.e., Rules 89(4B) and 96(10) of the

CGST Rules via Notification dated 08 October 2024, and

in the absence of any saving clauses or the benefit of

Section 6 of the General Clauses Act, all pending

proceedings-such as undisposed show cause notices,

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orders disposing of show cause notices issued after 08

October 2024, or even orders made before 08 October

2024 but not yet finalised due to appeals before the

Appellate Authorities or challenges before this Court, thus

not constituting “transactions past and closed”-are not

preserved and will stand lapsed.”

29. The Hon’ble Gujarat High Court has also in the case of Addwrap

Packaging (P.) Ltd. (supra) taken a similar view.

30. The Hon’ble Delhi High Court in the case of Vinayak

International Housewares Pvt. Ltd. (supra) while considering the

effect of the notification no.20/2025-Central Tax dated 8

th

October,

2024 as aforesaid, and upon considering the case of Kolhapur

Canesugar Works Ltd. (supra), the case of Addwrap Packaging

(P.) Ltd. (supra) and the case of Hikal Limited (supra), was pleased

to, in paragraph 18 thereof, observe as follows:-

“18. A conjoint reading of all the judicial precedents set out

above leads to the following conclusions:

(i) In the 54

th

meeting of the GST Council, the

recommendation made is relevant, as it clearly

observed that Rule 96(10) of CGST Rules leads

to unnecessary complication, without any

intended benefit and therefore the omission was

recommended.

(ii) Rule 96(10) of the CGST rules has been omitted

with effect from 8

th October, 2024 upon the

recommendations of the GST Council in its 54

th

meeting. The Kerala High Court in Sance

Laboratories Pvt. Ltd (Supra) has considered the

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constitutional validity of Rule 96(10) of the

CGST rules and has held that, if permitted to

stand, the constraints placed upon IGST

refunds under Rule 96(10) would run contrary

to the provisions of the IGST Act, especially

Section 16 of the IGST Act. As evident from the

above, the said omission of the said Rule has

also been considered by all the other High

Courts in above mentioned decisions.

(iii) Additionally, various High Courts through the

above mentioned decisions, have held that

following the decision of the Supreme Court in

Kolhapur Canesugar Works (Supra), Rule 96(10)

of the CGST rules having been omitted from the

Statute, it would also apply to all pending

proceedings. The Bombay High Court while

considering the same has held that unless and

until the transactions have passed and closed,

the benefit of omission of Rule 96(10) of the

CGST rules has been extended.

(iv) All pending SCNs, orders and even appeals filed

against orders would not be transactions

passed and closed and therefore, the

proceedings cannot continue under Rule 96(10)

of the CGST rules. The benefit of omission of

Rule 96(10) of the CGST rule sought to be

extended to all pending proceedings including

appeals.”

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31. Having regard to the above, on the omission of Rule 96(10), the

order dated 4

th February, 2025 no longer survives. The same is

accordingly quashed. All consequences shall follow.

32. There shall be no order as to costs.

33. Urgent Photostat certified copy of this order, if applied for, be

made available to the parties upon compliance of requisite

formalities.

(Raja Basu Chowdhury, J.)