M/s Goodluck India Limited & Anr. v. Union of India & Ors

GST Update/ 2026-27/0067

GST UPDATE ON OMISSION OF RULE 96(10) OF CGST RULES
In today’s Article we will discuss the recent judgment of the Hon’ble Supreme Court of India in the case of M/s Goodluck India Limited & Anr. v. Union of India & Ors., concerning the applicability of the omission of Rule 96(10) of the CGST Rules, 2017 to refund proceedings pending as on the date of its omission.
The judgment assumes importance as several refund proceedings and disputes were pending before various High Courts in relation to the restriction imposed by Rule 96(10) on exporters who had availed specified benefits under the exemption/concessional notifications. The key issue before the Hon’ble Supreme Court was whether, after omission of Rule 96(10) with effect from 08.10.2024, the said restriction could still be applied to refund proceedings which were pending on the date of omission.
The judgment provides significant clarity on the legal effect of omission of a statutory rule in the absence of a saving clause and provides substantial relief to exporters whose refund proceedings were pending when Rule 96(10) was omitted.
Brief Facts of the Case –
Rule 96(10) of the CGST Rules, 2017 imposed restrictions on refund of IGST paid on goods or services exported out of India where the exporter had availed certain specified benefits under the notifications referred to in the said provision.
Subsequently, Notification No. 20/2024 – Central Tax dated 08.10.2024 omitted Rule 96(10) of the CGST Rules, 2017.
After such omission, a dispute arose as to whether the benefit of omission would be available only to future refund claims or whether it would also extend to proceedings which were already pending on the date of omission.
The issue became significant as several proceedings were pending before different High Courts and conflicting views had emerged regarding the effect of omission of Rule 96(10).
The Union of India and the Department challenged the judgment of the High Court which had held that omission of Rule 96(10) would apply to pending proceedings as well.
Core Issue Before the Court –
Whether omission of Rule 96(10) of the CGST Rules, 2017 with effect from 08.10.2024 would benefit assessees in refund proceedings pending on the date of such omission, thereby permitting consideration of refund claims without applying the restriction contained in Rule 96(10)?
Assessee’s Argument –
The assessees contended that Rule 96(10) had been completely omitted from the CGST Rules with effect from 08.10.2024 and that the notification omitting the provision did not contain any saving clause preserving the operation of Rule 96(10) in respect of pending proceedings.
It was therefore argued that once the provision stood omitted, it could not continue to govern proceedings which were pending on the date of its omission.
The assessees relied upon the settled principle that omission of a statutory provision results in its disappearance from the statute book unless there is a specific statutory provision or saving clause providing for continuation of proceedings under the omitted provision.
Accordingly, the restriction under Rule 96(10) could not be applied to pending refund proceedings after 08.10.2024.
Department’s Argument –
The Revenue opposed the applicability of the omission to pending proceedings and contended that the omission of Rule 96(10) should operate only prospectively.
The Department relied upon the recommendation of the 54th GST Council meeting, wherein the Law Committee had recommended that Rule 96(10), along with Rule 89(4A) and Rule 89(4B), be omitted with prospective effect.
It was therefore argued that the legislative intention was not to disturb proceedings which had already arisen under Rule 96(10) and that pending proceedings should continue to be governed by the provision as it existed when the proceedings were initiated.
The Department sought to distinguish the principle relating to omission of statutory provisions and argued that the pending proceedings under Rule 96(10) should not automatically come to an end merely because the provision had subsequently been omitted.
Court’s Observation and Decision –
The Hon’ble Supreme Court examined the effect of omission of Rule 96(10) and referred to the Constitution Bench judgment in Kolhapur Canesugar Works Ltd. v. Union of India, wherein the legal effect of omission of a rule was considered.
The Court reiterated the principle that omission of a statutory provision has the effect of obliterating the provision from the statute book. Where the legislature intends pending proceedings under an omitted provision to continue, an appropriate saving clause or statutory mechanism is required to preserve such proceedings.
The Court noted that Rule 96(10) was omitted by Notification No. 20/2024 with effect from 08.10.2024 and, importantly, there was no saving clause or sunset clause providing for continuation of the restriction contained in the omitted provision in respect of pending proceedings.
The Supreme Court further considered the recommendation of the 54th GST Council. The Court observed that the recommendation of the GST Council regarding prospective operation was advisory in nature and was not binding upon the rule-making authority.
The Court also noted that Rule 96(10) had been omitted because it was leading to “unnecessary complications without any intended benefit being served.” In the absence of a saving clause, the Court held that the intention behind the omission could not be interpreted to mean that such unnecessary complications would continue for pending proceedings.
The Hon’ble Supreme Court therefore held that the omission of Rule 96(10) applies to all proceedings pending on the date of its omission.
Consequently, refund claims pending as on 08.10.2024 are required to be considered without applying the restriction contained in Rule 96(10).
The Court found no reason to interfere with the judgment of the High Court and dismissed the appeals filed by the Revenue. The Court also directed that a copy of the judgment be sent to all High Courts so that pending matters relating to the omission of Rule 96(10) could be brought to finality.

*CA Pradeep Jain*_

*This is solely for educational purpose*

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