2025-VIL-959-BOM
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SGST High Court Cases

GST - Challenge to Constitutional validity of Rules 89(4B) and Rule 96(10) of the CGST Rules, 2017, Effect of omission of the impugned Rules without any savings clause - Petitioners, which are exporters and importers of goods, challenged the constitutional validity of Rules 89(4B) and 96(10) of the CGST Rules, which provided certain conditions for claiming refund of IGST paid on exports. During the pendency of these petitions, the impugned Rules were omitted by a Notification dated 08 October 2024, without any savings clause to protect the pending proceedings – Whether the impugned show cause notices or orders issued thereon, citing non-compliance with the omitted or repealed Rules, are valid and can be enforced - HELD – There is no need to examine the issue of Constitutional validity of the impugned Rules as the petitions can be disposed of on other grounds. However, it is noted that the High Court in Kerala had already declared Rule 96(10) as unconstitutional, which would have effect throughout India - In the absence of any savings clause, the common law principle that a repeal or omission obliterates the repealed provision from the statute book would apply. The pending proceedings, including show cause notices and orders not attaining finality, would lapse upon the omission of the impugned Rules - The Rule 89(4B) and 96(10) of the CGST Rules are not purely procedural but impact substantive rights of the parties. Therefore, the removal or repeal of Rules 89(4B) and 96(10) would essentially erase these Rules from existence as if they had never been enacted or passed, and they should be regarded as provisions that never existed, except in relation to “transactions past and closed” – In the present petitions, none of the impugned show cause notices or orders could be regarded as "transactions past and closed" as they had not attained finality – Further, the Section 174(3) cannot be regarded as a savings clause to protect the pending proceedings under the impugned Rules omitted vide Notification dated 08 October 2024 - The impugned show cause notices and orders are quashed and the authorities are directed to consider and dispose of the petitioners' refund applications within four months – The writ petitions are disposed of in favour of assessees - Whether Section 6 of the General Clauses Act saves the impugned pending proceedings or orders - HELD - The Section 6 of the General Clauses Act does not apply as the impugned Rules were omitted by a notification and not by a Central Act or Regulation as required under Section 6. The Constitution Bench decisions in Rayala Corporation Pvt Ltd and Kolhapur Cane Sugar Works Ltd were relied upon - Based upon the provisions of Section 6 of the General Clauses Act, 1897, the Respondents cannot assert that the show cause notices issued under the omitted or repealed Rules or the orders made in disposing of show cause notices after the Rules or the orders that had not attained finality are saved by virtue of the provisions of Section 6 of the General Clauses Act, 1897.
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