OMISSION OF RULE 96(10) WITHOUT SAVING CLAUSE NULLIFIES PENDING PROCEEDINGS

ISSUE

Whether the omission of Rules 89(4B) and 96(10) of the CGST Rules by Notification No. 20/2024, without any specific saving clause, renders all pending proceedings (Show Cause Notices, Adjudication Orders, Appeals) based on these rules redundant and invalid ab initio.

FACTS

The Change: Notification No. 20/2024 dated 08-10-2024 omitted Rules 89(4B) and 96(10) from the CGST Rules, 2017.
The Conflict: The petitioners had filed IGST refund applications for exports. The Department had issued Show Cause Notices (SCNs) or rejected refunds relying on the now-omitted rules (which restricted refunds if certain benefits like Advance Authorization were availed).
Pending Status: In some cases, orders were passed, and appeals were filed. In others, orders-in-appeal were passed, but the matter could not reach the Appellate Tribunal (GSTAT) as it was not yet constituted. Thus, the proceedings had not attained “finality.”
Petitioner’s Plea: The petitioners argued that since the rules were omitted without any clause saving pending actions, the legal basis for the denial of refund stood erased.

DECISION

Effect of Omission: Relying on the Gujarat High Court decision in Addwrap Packaging (P.) Ltd. and the Bombay High Court in Hikal Ltd., the Court held that an “omission” of a rule without a saving clause is different from a “repeal.” It obliterates the provision from the statute book as if it never existed for pending matters.
Not Past and Closed: The doctrine of “transactions past and closed” applies only where proceedings have attained finality. Since the Appellate Tribunal was not functional, or writs were pending, these cases were still “live.”
Proceedings Lapsed: Consequently, all pending SCNs, rejection orders, and appellate orders based on the omitted Rules 89(4B) and 96(10) were held to have lapsed.
Relief: The impugned actions were quashed. The petitioners were held entitled to the refund, and the Department was directed to process the pending applications.
Verdict: [In Favour of Assessee]

KEY TAKEAWAYS

Omission vs. Repeal: When a rule is simply “omitted” without a saving clause (unlike a repeal which usually has Section 6 of the General Clauses Act protection), it generally kills all pending litigation based on that rule.
Pending Means Pending: As long as you have an appeal or writ alive in the system (not finally settled by the highest court or time-barred), you can claim the benefit of this omission.
Rule 96(10) Restrictions: The restrictions on claiming IGST refund (payment of tax route) if you used Advance Authorization or EOUs are now effectively removed for all pending disputes.

HIGH COURT OF GUJARAT

JJ Plastalloy (P.) Ltd.

Union of India

A.S. Supehia and Pranav Trivedi, JJ.

R/Special Civil Application Nos. 3081, 4332, 6457, 7047, 8103, 8227, 8568, 10569, 11299, 11410, 12157, 12436 and 15510 of 2025
CIVIL APPLICATION (FOR AMENDMENT) NO. 2 of 2025

NOVEMBER 20, 2025

Anand Nainawati for the Petitioner. Utkarsh R. Sharma for the Respondent.

JUDGMENT

A.S. Supehia, J.- RULE returnable forthwith. Learned advocate Mr.Shashvata U. Shukla waives service of notice of Rule on behalf of the respondents. Since a common issue arises in all the writ petitions, the same are decided by a common judgment and order.

2. The issues emanate from the judgment of the Coordinate Bench of this Court dated 13^th June, 2025, passed in Addwrap Packaging (P.) Ltd. v. Union of India GST 736/ 98 GSTL 241 (Guj)/Special Civil Application No.22519 of 2019 and allied matters, and also from the judgment of the Bombay High Court in the case of Hikal Ltd. v. Union of India (Bom)/2025 (9) TMI 806 – Bombay High Court (Writ Petition No.78 of 2025), decided on 11^th September, 2025.

3. Learned advocates appearing for the respective petitioners have placed reliance on the aforenoted judgments and have submitted that the present writ petitions may be disposed of in terms of the said judgments. It is submitted that the impugned action of the respondents will pale into insignificance after the issuance of Notification No.20/2024 dated 8^th October, 2024, repealing the provisions of Rule 89(4B) and Rule 96(10) of the Central Goods and Services Tax Rules, 2017 (“the Rules”), which will not survive, as considered in the aforesaid judgments.

4. However, learned advocates appearing for the respondentdepartments have urged that the action of the department in issuing the show-cause notices and orders may not be set aside. It is contended that the omission of the Rules is prospective in nature and hence the Notification repealing the Rules would not be applicable to all pending proceedings/cases before the authority and the High Court. It is submitted that in cases where appeal proceedings are concluded and an OIA (order in appeal) is passed prior to the omission of the Rules, and the writ petitions are pending, such cases will stand saved.

5. It is not in dispute that the Coordinate Bench of this Court, in a group of matters being Special Civil Application No.22519 of 2019, vide judgment dated 13^th June, 2025, has dealt with the issue with regard to Notification No.20/2024 dated 8th October, 2025, repealing Rule 96(10) of the Rules without any saving clause, and has held as under :

“203. In view of above conspectus of law, it appears that the recommendations of the GST Council to omit Rule 96(10) prospectively would apply to all the pending proceedings and cases. However, the contention on behalf of the Revenue that the petitioners have filed these petitions challenging the validity of Rule 96(10) cannot be said to be pending proceedings is without any basis because the petitioners have also challenged the show cause notices as well as orders-in-original passed by the respondents by invoking Rule 96(10) for rejecting the refund claims of the petitioners and therefore, it can be said that these petitions are nothing but pending proceedings before the Court which has not achieved finality when the Notification No.20/2024 came into force with effect from 8th October, 2024.

204. By Notification No.20/2024 Rules, 2024 have been notified and as per Rule 10 of the said Rules, Rule 96(10) of the CGST Rules has been omitted with prospective effect. This would give rise to three situations, firstly, whether the same would be applicable retrospectively, or secondly, prospectively or thirdly, same would be applicable prospectively but also to “pending proceedings”. As discussed here-in-above, Rule 10 of Rules, 2024 is applicable prospectively and the same also would be applicable to pending proceedings.

205. Therefore, we are of the opinion that Notification No.20/2024 dated 8th October, 2024 would be applicable to all the pending proceedings/cases meaning thereby that Rule 96(10) would stand omitted prospectively but applicable to pending proceedings/cases where final adjudication has not taken place.

206. Therefore, in view of foregoing reasons, the omission of Rule 96(10) would apply to all the proceedings/cases/petitions which are pending for adjudication either before this Court or before the respondent adjudicating authority and no further proceedings are required to be carried forward and petitioners would be entitled to maintain refund claims of IGST paid on export of goods.

207. In view of above findings, as Rule 96(10) would not be applicable to the pending proceedings, in view of omission of Rule 96(10) by Notification No.20/2024 with effect from 8th October, 2024, the question of challenge to the vires and validity of rule 96(10) is not required to be considered at this stage.

208. The petitions therefore succeed in view of applicability of Notification No.20/2024 whereby Rule 96(10) is omitted and the said Notification would be applicable to all the pending proceedings/cases as on 8th October, 2024. The impugned show cause notices and the orders-in-original are therefore, quashed and set aside. The petitioners are therefore, entitled to maintain refund claims for IGST paid for the export of goods as per Rule 96 of the CGST Rules, 2017 in accordance with law.”

6. We may, at this stage, refer to the decision of the Bombay High Court in the case of Hikal Ltd. (supra), wherein the Bombay High Court, while considering the Notification dated 8^th October, 2024 and the provisions of Rules 89(4B) and 96(10) of the Rules, and the analogous issue, has held thus:

“59. From the above, it is indisputable that the impugned rules stand deleted. The only dispute revolves around the scope of such omission or repeal. The Petitioners contend that any savings clause did not back such omission or repeal, and therefore, the common law principle regarding repeals obliterating the repealed provision from the statute book or rule book would apply. The Respondents admit the omission or repeal but contend that the common law rule would not apply because pending proceedings have been expressly saved.

60. Justice G P Singh, in his “Principles of Statutory Interpretation”, 15th edition, has explained that under the common law, the consequences of the repeal of a statute are very drastic. Except as to transactions past and closed, a statute after its repeal is treated as completely obliterated as if it had never been enacted. The effect is to destroy all inchoate rights and all causes of action that may have arisen under the repealed statute. Therefore, leaving aside the cases where proceedings were commenced, prosecuted and brought to a finality before the repeal, no proceeding under the repealed statute can be commenced or continued after the repeal (See Keshvan v. State of Bombay31, State of Punjab v. Mohar Singh 32, Qudrat Ullah v. Municipal Board, Bareilly 33, State of Rajasthan v. Mangilal Pindwal 34 and Mohan Raj v. Dimbeswari Saikia & Anr 35).

XXX XXX XXX

68. In Keshavan Menon v. State of Bombay (supra), the expression and concept of “transactions past and closed” was explained in the context of repeal of an Act in paragraph Nos. 11, 12 and 14, which are transcribed below for the convenience of reference: –

“11. This statement of law by Craies was referred to with Approval and adopted by the F. C. in J. K. Gas, Plant Manufacturing Co., (Rampur), Ltd. v. Emperor, (1947) F.C.R. 141 at p. 166: (A. I. R. (34) 1947 F.C. 38:48 Cr. L. J. 886). As to the effect of the repeal of an Act, the following passage from Craies’ book seems to sum up the legal position as it obtained in England before the enactment of the Interpretation Act of 1889 :

“When an Act of Parliament is repealed,” said Lord Tenterden in Surtees v. Ellison, (1829) 9 B. and C. 750 at p. 752: (7 L. J. K. B. 335), “it must be considered (except as to transactions past and closed) as if it had never existed. That is the general rule.” Tindal C. J. states the exception more widely. He says (in Kay v. Goodwin, (1830) 6 Bing. 576: (8 L.J.C.P. 212): “The effect of repealing a statute is to obliterate it as completely from the records of the Parliament as if it had never been passed; and it must be considered as a law that never existed except for the purpose of those actions which were commenced, prosecuted and concluded whilst it was an existing law.” (p. 350)”

12. Again, Crawford in his book on “Statutory Construction”dealing with the general effect of the repeal of an Act states the law in America to be as follows: “A repeal will generally, therefore, divest all inchoate rights which have arisen under the repealed statute, and destroy all accrued causes of action based thereon. As a result, such a repeal, without a saving clause, will destroy any proceeding, whether not yet begun, or whether pending at the time of the enactment of the repealing Act, and not already prosecuted to a final judgment so as to create a vested right” (pp. 599-600).

14. The author then proceeds to quote the following passage from Wall v. Chesapeake and Ohio Ry. Co., (125 N. E. 20):

“It is well settled that if a Statute giving a special remedy is repealed without a saving clause in favour of pending suits all suits must stop where the repeal finds them. If final relief has not been granted before the repeal went into effect, it cannot be after. If a case is appealed, and pending the appeal the law is changed, the appellate Ct. must dispose of the case under the law in force when its decision was rendered. The effect of the repeal is to obliterate the Statute repealed as completely as if it had never been passed, and it must be considered as a law which never existed, except for the purposes of those actions or suits which were commenced, prosecuted and concluded while it was an existing law. Pending judicial proceedings based upon a Statute cannot proceed after its repeal. This rule holds true until the proceedings have reached a final judgment in the Ct. of last resort, for that Ct., when it comes to announce its decision, conforms it to the law then existing, and may, therefore, reverse a judgment which was correct when pronounced in the subordinate tribunal from whence the appeal was taken, if it appears that pending the appeal a Statute which was necessary to support the judgment of the lower Ct. has been withdrawn by an absolute repeal.” (p. 601).

RELIEFS

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, 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.

7. A combined reading of the aforesaid judgments, which have dealt with Notification No.20/24 dated 8^th October, 2024, repealing the provisions of Rules 89(4B) and Rule 96(10), of the Rules exposit that the repealing of the provisions of the Rules without a saving clause renders the provisions redundant, right from the inception. The omission of the Rules would apply to all the proceedings/ cases/ petitions which are pending for adjudication either before this Court or before the respondent-adjudicating authority, or even to orders made before 8^th October, 2024 but not yet finalized due to appeals before the Appellate Authorities or challenges before this Court, since the same will not constitute “transactions past and closed”, and do not get preserved and will stand lapsed. We may also further clarify that the remedy of filing an appeal before the Appellate Tribunal is not available to the petitioners, since the Tribunal is not yet constituted, and hence they are constrained to file the writ petitions. Thus, since the petitioners have no remedy of filing an appeal because of the non-constitution of the Tribunal, it cannot be said that the OIAs have become final, and hence such orders will not constitute “transactions past and closed”. The orders which are challenged in the writ petitions will stand lapsed in view of the aforementioned decisions.

7.1. Thus, all writ petitions are allowed; the impugned action of the respondents is quashed and set aside. The petitioners are entitled to refund. All the pending applications for refund shall be processed. In case the applications are rejected and the refund is refused, the same shall stand restored and shall be further processed. Needful shall be done within a period of 12 (twelve) weeks from the date of receipt of the writ of the present order. Rule is made absolute. No order as to costs.

8. In view of above, learned advocate for the applicant does not press Civil Application (For Amendment) No.2 of 2025 in R/Special Civil Application No.10569 of 2025. Hence, the present Civil Application stands disposed of as not pressed.