Background of the Case
The writ petition was initially filed with twofold prayers:
To declare Notification Nos. 54/2018-CT and 39/2018-CT, which amended Rule 96(10), as ultra vires the CGST and IGST Acts.
To quash the final recovery order dated 30th January 2025, issued under Rule 96(10), on the ground that the rule had been omitted prior to the order.
However, during the hearing, the petitioner chose to restrict the challenge solely to the final order.
Who Was the Petitioner?
A registered taxpayer engaged in manufacturing and exporting plastic containers, the petitioner had availed an IGST refund of ?1.96 crore. A show-cause notice was issued in January 2024 alleging violation of Rule 96(10), which bars IGST refunds if the exporter has availed specified exemptions.
Legal Arguments Presented
Petitioner’s Case
The rule was omitted on 8th October 2024—before the final order was passed.
Quoting Supreme Court's decision in Kolhapur Canesugar Works Ltd. v. Union of India, the petitioner argued:
“Omission of a rule without a saving clause erases it completely from the statute book.”
Once omitted, no legal action can be taken based on it, not even if the proceedings were initiated while it was still in force.
Relied on two additional rulings:
Aeroflex Industries Ltd. v. Union of India (Bombay HC, 2024)
Saru Silver Alloys Pvt. Ltd. v. Union of India (Allahabad HC, 2025) [2024 TAXONATION 3505 (ALLAHABAD)]
Respondent’s Counter
The show-cause was validly issued while the rule was in force.
Final order was merely a continuation of already initiated proceedings.
Omission of the rule shouldn’t invalidate the final order.
Requested time to file an affidavit and present supporting judgments.
Court’s Analysis
Rule 96(10) was omitted without any saving clause.
Citing Kolhapur Canesugar, the court held:
“Section 6 of the General Clauses Act, 1897, doesn’t apply to rules—only to Acts and Regulations.”
Since there was no replacement rule and no legislative intent to continue pending proceedings, the omission halts all related actions.
Interim Relief Granted
The court observed that:
The proceedings must stop where the omission finds them.
No order should have been passed under Rule 96(10) after 8th October 2024.
Therefore, the impugned order dated 30th January 2025 is stayed until the final disposal of the petition.
The respondent has been granted time to file their affidavit, and the matter will be taken up again post-exchange of pleadings.
GST Case Law Glen Industries Private Limited VersusThe Deputy Director Directorate General of GST Intelligence
Citation-2025 TAXONATION 649 (CALCUTTA)
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