GST
TRT-2025-
High court of Bombay
Date:-11-09-25
In:-
Issue Favourable to Tax Payer ?:-
Order date: 11 Sept 2025
Parties: Hikal Limited v. Union of India & Ors.
Facts -
- Multiple petitioners, including Hikal Ltd. and Yasho Industries Ltd., challenged SCNs and orders based exclusively on alleged non-compliance with Rule 89(4B) and Rule 96(10) of the CGST Rules, 2017. The Petitioner has pleaded that it operates through two manufacturing units: -
- Taloja (EOU): imports duty-free raw materials, exports ~90% of goods.
- Mahad (DTA): procures under Advance Authorisation/IGST exemption.
- Petitioner claimed IGST refunds on exports, which were duly sanctioned earlier
- Both Rules were omitted by Notification dated 08.10.2024 (Second Amendment Rules, 2024), with no express savings clause.
- Petitioners contended that proceedings still pending or orders under challenge, founded solely on these Rules, automatically lapsed upon omission.
- The Union argued that Section 6 of the General Clauses Act preserved such proceedings, but could not dispute that most cases in the batch were predicated only on the omitted provisions.
Issue -
- Whether, in absence of a savings clause, pending proceedings and orders based solely on non-compliance with Rules 89(4B) and 96(10) of the CGST Rules survive the omission of those Rules?
Order -
- The Court held that Omission/repeal without savings clause makes pending proceedings unsustainable, unless they qualify as “transactions past and closed. Omission of Rules 89(4B) and 96(10) without a savings clause meant that pending proceedings not past and closed lapsed, as Section 6 of the General Clauses Act does not extend to such omissions.
- It quashed all show-cause notices and original orders in the batch that were founded exclusively on the omitted Rules, holding that these could not be legally sustained.
- Refund applications affected by such proceedings were directed to be restored and decided afresh within four months, after granting assessees proper hearing.
- The Court emphasized that omission without explicit saving provisions removes the very foundation of such proceedings, serving as a caution for future legislative drafting.
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