Vinayak International Housewares Pvt Ltd Vs Union of India & Ors (Delhi High Court)
Delhi High Court held that benefit of omission of Rule 96(10) of the Central Goods and Services Tax Rules sought to be extended to all the pending proceedings. Accordingly, proceedings deserves to be quashed. Thus, writ petitions are allowed.
Facts- The present petitions have been filed by the Petitioners under Article 226 of the Constitution of India, inter alia, challenging the vires of Rule 96(10) of the Central Goods and Services Tax Rules, 2017. Notably, the Petitioner was issued summons on 6th February, 2023 under Rule 96(10) of the CGST Rules, seeking details of total refunds claimed through the IGST route and was asked to appear before the Department. Thereafter, the Department issued several Show Cause Notices. While the summons were issued, the Petitioner challenged the constitutional validity of Rule 96(10) and also challenged the summons which were issued to the Petitioner.
Conclusion- Held that rule 96(10) of the CGST rules has been omitted with effect from 8thOctober, 2024 upon the recommendations of the GST Council in its 54th The Kerala High Court in Sance Laboratories Pvt. Ltd has considered the constitutional validity of Rule 96(10) of the CGST rules and has held that, if permitted to stand, the constraints placed upon IGST refunds under Rule 96(10) would run contrary to the provisions of the IGST Act, especially Section 16 of the IGST Act. As evident from the above, the said omission of the said Rule has also been considered by all the other High Courts. Additionally, various High Courts through the above mentioned decisions, have held that following the decision of the Supreme Court in Kolhapur Canesugar Works, Rule 96(10) of the CGST rules having been omitted from the Statute, it would also apply to all pending proceedings. The Bombay High Court while considering the same has held that unless and until the transactions have passed and closed, the benefit of omission of Rule 96(10) of the CGST rules has been extended. All pending SCNs, orders and even appeals filed against orders would not be transactions passed and closed and therefore, the proceedings cannot continue under Rule 96(10) of the CGST rules. The benefit of omission of Rule 96(10) of the CGST rule sought to be extended to all pending proceedings including appeals.
