In a recent ruling, the Delhi High Court addressed the implications of the deletion of Rule 96(10) of the Central Goods and Services Tax (CGST) Rules, which impacted exporters' eligibility for Integrated GST (IGST) refunds. The case involved multiple exporters, including M/s Harihar Exports, who faced summons and show-cause notices based on the now-omitted rule. They contested these proceedings, arguing that the rule was removed effective October 8, 2024, without a saving clause, making any related actions unenforceable.
The GST Council had previously recommended the rule's deletion, citing its unnecessary complications for exporters. Various High Courts across India had already determined that proceedings under a rule that has been omitted without a saving clause automatically lapse. This legal principle was central to the exporters' challenge.
The Delhi High Court confirmed that without a saving clause, Rule 96(10) ceased to exist from the specified date, rendering all related proceedings null and void. The court applied the doctrine from the Kolhapur Canesugar Works case, emphasizing that Section 6 of the General Clauses Act cannot revive rights or obligations under a repealed subordinate legislation. Consequently, all actions initiated under Rule 96(10), including summons and show-cause notices against the petitioners, were quashed.
Read More: GST - Delhi High Court: Court hold all the proceedings initiated under deleted Rule 96(10) CGST lapse automatically and cannot be continued by the department ; Petitioners can continue receiving IGST refund benefits [Order attached]
The ruling entitles the petitioners to claim or continue receiving IGST refunds without restrictions from the deleted rule, marking a significant decision for exporters affected by the rule's omission. This judgment underscores the importance of saving clauses in legislative amendments and the automatic lapse of proceedings under omitted rules.
Parties: M/s Harihar Exports & Ors. v. Union of India & Ors.
Order Date: 20 November 2025
Facts
- The petitioners, all exporters, were issued summons and show-cause notices alleging ineligibility to claim IGST refunds under Rule 96(10) of the CGST Rules.
- They challenged the vires of Rule 96(10) and the consequential proceedings issued under it, contending that the rule had already been omitted with effect from 08.10.2024 without a saving clause.
- The GST Council had recommended deletion of Rule 96(10) in its 54th meeting as the provision created unnecessary complications for exporters.
- Several High Courts, including Kerala, Calcutta, Gujarat, Uttarakhand and Bombay, had already held that proceedings under an omitted rule lapse automatically unless expressly saved.
Issue
- Whether proceedings initiated under Rule 96(10) can continue after the rule was omitted on 08.10.2024 without any saving clause?
Order
- The Court held that Rule 96(10) stood entirely omitted from 08.10.2024, and in the absence of a saving clause, all pending or ongoing proceedings initiated under it automatically lapse.
- It observed that the doctrine in Kolhapur Canesugar Works applies, and Section 6 of the General Clauses Act cannot revive rights or liabilities under a deleted subordinate legislation.
- The Court noted that no authority can sustain or conclude proceedings under a provision that has ceased to exist, and that such actions would be void and unenforceable.
- All summons, show-cause notices, and orders issued under Rule 96(10) against the petitioners were therefore quashed.
- The petitioners were held entitled to claim or continue receiving IGST refund benefits without any restriction arising from the deleted rule.
