MAC Industry Vs Union of India & Anr. (Gujarat High Court)
Summary: Gujarat High Court allowed the writ petition filed by MAC Industry challenging the show cause notice dated 26.03.2025 and consequential order dated 09.06.2025 concerning Rule 96(10) of the Central Goods and Services Tax Rules, 2017. At the outset, the petitioner submitted that the controversy stood concluded by the Supreme Court’s decision in Goodluck India Limited & Anr. Vs Union of India & Ors., and the Revenue was unable to controvert the applicability of that ruling.
The dispute concerned the effect of omission of Rule 96(10) of the CGST Rules through Notification No. 20/2024 with effect from 08.10.2024. The Supreme Court in Goodluck India had considered whether the omission would benefit assessees in pending proceedings relating to refund of integrated tax paid on exports. It held that, in the absence of a saving clause or sunset clause, the omitted provision could not be kept alive for pending proceedings merely because the GST Council’s recommendation contemplated prospective omission. The recommendation was advisory and did not bind the rule-making authority.
The High Court noted that the Supreme Court had observed that Rule 96(10) was omitted because it was causing unnecessary complications without serving the intended benefit. Significantly, in the present case, the show cause notice itself was issued on 26.03.2025, after Rule 96(10) had already been omitted with effect from 08.10.2024. The consequential order was thereafter passed on 09.06.2025.
Accordingly, following the Supreme Court ruling, the Gujarat High Court allowed the writ petition. It held that the impugned show cause notice dated 26.03.2025 and the impugned order dated 09.06.2025 issued by respondent no.2 were required to be quashed and set aside, and accordingly quashed both proceedings.
Cases Discussed
- Goodluck India Limited & Anr. Vs Union of India & Ors. — 330/112 GSTL 3 (SC) / 2026 SCC OnLine SC 1523 (Supreme Court) — Relied upon for the effect of omission of Rule 96(10) of the CGST Rules without a saving or sunset clause and its application to pending proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. At the outset, learned advocate Mr. Abhay Desai has submitted that the issue raised in the present writ petition has been laid quietus by the decision of the Apex Court in the case of Goodluck India Ltd. v. Union of India 330/112 GSTL 3 (SC)/2026 SCC OnLine SC 1523. Learned Senior Standing Counsel Mr. Archit P. Jani is unable to controvert that the issue with regard to applicability of provision of Rule 96(10) of the Central Goods and Services Tax Rules, 2017 (for short “the CGST Rules”) has been interpreted by the Apex Court in the said judgment.
2. In the present writ petition, the petitioner has prayed for the following reliefs:
“09. In view of the aforesaid premises, the petitioners humbly pray that:
RELIEFS CLAIMED
A. Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other writ, order or direction quashing and setting aside the impugned SCN dated 26/03/2025 (annexed at Annexure ‘A’) issued by the 2 nd Respondent as well as the impugned order dated 09/06/2025 (annexed at Annexure ‘B’) passed by the 2 nd Respondent as being arbitrary, illegal, excessive and wholly without jurisdiction;
B. Pending notice, admission and final hearing of this petition, Your Lordships may be pleased to stay further proceedings for recovery/coercive action pursuant to the impugned order dated 09/06/2025 (annexed at Annexure ‘B’) passed by the 2 nd Respondent
C. Ex parte ad interim relief in terms of prayer ‘B’ may kindly be granted;
D. Such further relief(s) as deemed fit in the facts and circumstances of the case may kindly be granted in the interest of justice, for which act of kindness your petitioners shall forever pray.”
3. The issue with regard to the omission of Rule 96(10) of the CGST Rules vide Notification No.20/2024 with effect from 08.10.2024, whether would ensure to the benefit of assessee in the pending proceedings, wherein, there was a claim of refund of integrated tax paid on goods and services exported out of India can be considered, without restriction under Rule 96(10) of the CGST Rules was considered by the Apex Court. In the said judgment, the Apex Court has held thus:
“7. The Constitution Bench decision applies squarely in the above case. We may also observe that even going by the recommendations as extracted hereinabove, sub-rule (10) of Rule 96 was omitted because it was leading to unnecessary complications without any intended benefit being served’ (sic). As fairly submitted by the learned ASG the legislature has not brought in any saving clause or a sunset clause, when sub-rule (10) of Rule 96 was omitted. The recommendation that the omission should be prospective is also advisory in nature and does not bind the rule making authority. The intention to omit the rule without any saving clause was to bring to an end, the unnecessary complications once and for all and the intention cannot be to keep alive the unnecessary complications insofar as the pending proceedings are concerned.
8. We find no good reason to interfere with the well-reasoned judgment of the High Court. We are told that there are many proceedings pending before the various High Courts and conflicting decisions have also been passed. We hope that such proceedings would get closure with this judgment.
9. The Registry is directed to send a copy of this order to all the High Courts. The Registry of the High Courts will ensure that the cases relating to the subject issue of omission of Rule 96(10) would be placed before the Courts having roster, after taking appropriate orders from the Hon’ble Chief Justice of the respective High Courts, expeditiously to bring quietus in the subject litigation.”
4. Thus, as held by the Apex Court, in absence of any saving clause or a sunset clause on the omission of Rule 96(10) of the CGST Rules, the recommendation vide Notification No.20 of 2024 dated 08.10.2024 would be prospective in nature. Even otherwise, in the facts of the present case, the show cause notice has been issued on 26.03.2025, i.e. after omission of Rule-96(10) of the CGST Rules.
5. Hence, in view of the aforesaid, the writ petition is allowed. The impugned show cause notice dated 26.03.2025 as well as the impugned order dated 09.06.2025 issued by the respondent no.2 are required to be quashed and set set aside and the same are hereby quashed and set aside.
