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GST - Zero-rated supply, Refund, Rule 96(10) of CGST Rules, 2017 - Challenge to validity of Rule 96(10) of the CGST Rules on the ground that the Rule 96(10) is ultra vires the provisions of Section 16 of the IGST Act, 2017 - Petitioners are exporters who are entitled to claim a refund of taxes paid on input services and input goods or the IGST paid on exports under Section 16 of the IGST Act - the provisions of Rule 96(10) of the CGST Rules, 2017 impose certain restrictions on the right to claim such refund - Whether Rule 96(10) of the CGST Rules is ultra vires the provisions of Section 16 of the IGST Act - HELD - the provisions of Section 16 of the IGST Act. both before and after its amendment, suggests that the Section itself has not imposed any restriction in the matter of availing either refund of taxes paid on input goods and input services or claiming refund of IGST after payment of IGST on the exports - The words “subject to such conditions, safeguards and procedure as may be prescribed” in Section 16(3)(a)&(b) of the IGST Act and the provisions of Section 20 of the IGST Act and Section 54 of the CGST Act do not authorise the imposition of restrictions in such a manner that it would completely take away the right granted under Section 16 of the IGST Act - the provisions of Rule 96(10) of the CGST Rules as presently worded create a restriction not contemplated by Section 16 of the IGST Act on the right to refund. The Rule 96(10) of the CGST Rules as presently worded is ultra vires the provisions of Section 16 of the IGST Act, as it is 'manifestly arbitrary' within the meaning of the law and the provision as it stands today produces absurd results, not intended by the Legislature – The Notification No.20/2024-CT, dated 08-10-2024, has now been issued deleting the provisions of Rule 96(10) of the CGST Rules w.e.f. 08-10-2024. However, the Notification is prospective and does not deal with cases where the refund of IGST has either been denied or is proposed to be denied on account of the provisions contained in Rule 96(10) of the CGST Rules. Therefore, notwithstanding the deletion of Rule 96(10) w.e.f. 08-10-2024, it falls upon this Court to declare upon its validity for the prior period - The Rule 96(10) of the CGST Rules, as inserted by notification No.53/2018-CT dated 09-10-2018 w.e.f. 23-10-2017, as ultra vires the provisions of Section 16 of the IGST Act and unenforceable on account of being manifestly arbitrary - No proceedings shall be taken to recover any IGST that has been refunded to the petitioners by applying the provisions of Rule 96(10) of the CGST Rules for the period between 23-10-2017 and 08-10-2024 – the writ petitions are allowed
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