B V L Granites Vs Additional Commissioner of Central Taxes (Andhra Pradesh High Court)
The Andhra Pradesh High Court disposed of two writ petitions through a common order as both raised an identical question of law. Proceedings had been initiated against the petitioners for recovery of benefits availed under Rule 96 of the CGST Rules, 2017, on the ground that they had violated the conditions prescribed under Rule 96(10). The proceedings resulted in assessment orders dated 09.01.2025 and 17.06.2025, which were challenged before the High Court.
During the pendency of the proceedings before the first respondent and before the writ petitions were filed, Rule 96(10) of the CGST Rules was omitted with effect from 08.10.2024 without any clause saving actions initiated under that provision.
The Court noted that the effect of the omission had been considered by the Bombay High Court in Hikal Limited Vs. Union of India, the Gujarat High Court in Addwrap Packaging Private Limited Vs. Union of India & Ors, and the Uttarakhand High Court in M/s. Sri Sai Vishwas Polymers Vs. Union of India & Ors, dated 30.04.2025 in W.P(MB).No.103 of 2025. According to the supplied judgment, all these High Courts had taken a consistent view that omission of Rule 96(10) without a saving clause would nullify pending proceedings under the provision.
The respondents contended that removal of Rule 96(10) would not affect the pending proceedings and that the cited judgments would not apply. The High Court rejected this contention. It observed that proceedings initiated under a provision can continue after its deletion only when the omission is accompanied by a saving clause. Since Rule 96(10) was omitted without such a saving clause, the pending proceedings would also stand lapsed, subject to the provisions of the General Clauses Act, 1897, particularly Section 6.
Following the judgments of the various High Courts, the Andhra Pradesh High Court allowed both writ petitions and set aside the impugned assessment orders dated 09.01.2025 and 17.06.2025. It further held that any amounts recovered under the proceedings would be liable to be refunded to the petitioners. There was no order as to costs, and pending miscellaneous applications, if any, were directed to stand closed.
Cases Discussed
- M/s. Sri Sai Vishwas Polymers Vs. Union of India & Ors (Uttarakhand High Court), dated 30.04.2025 in W.P(MB).No.103 of 2025
- Hikal Limited Vs. Union of India (Bombay High Court), 2025 (9) TMI 806
- Addwrap Packaging Private Limited Vs. Union of India & Ors (Gujarat High Court), (2025) 31 Centax 274 (Guj.)/2025 (98) G.S.T.L 241 (Guj.)
FULL TEXT OF THE JUDGMENT/ORDER OF ANDHRA PRADESH HIGH COURT
As both these Writ Petitions raised an identical question of law, they are being disposed of by way of this Common Order.
2. Heard Sri Anil Kumar Bezawada, learned counsel appearing for the petitioner and Smt. Santhi Chandra, learned Senior Standing Counsel appearing for the respondents, in W.P.No.12412 of 2025 and Y. Siri Reddy, learned counsel appearing on behalf of Sri Y. Sreenivasa Reddy, learned counsel appearing for the petitioner and Smt. D. Nagaraja Kumari, learned Standing Counsel appearing for the respondents, in W.P.No.25219 of 2025.
3. In both these cases, the proceedings had been initiated against the petitioners for recovery of benefits availed by the petitioners under Rule-96 of the Central Goods & Services Rules, 2017 [for short “the CGST Rules”]. These proceedings had been initiated on the ground that the petitioners have violated the conditions set out in Rule-96(10) of the CGST Rules and as such, the petitioners are liable to return the benefits obtained under Rule-96 of the CGST Rules. The aforesaid proceedings ended with an Order, dated 09.01.2025, passed by the 1st respondent, in W.P.No.12412 of 2025 and an Order, dated 17.06.2025, passed by the 1st respondent, in W.P.No.25219 of 2025. The petitioners being aggrieved by these Orders of assessment, have approached this Court by way of the Writ Petitions.
4. Even before these Writ Petitions came to be filed and during the time when the proceedings were going on before the 1st respondent, in each of the Writ Petitions, Rule-96(10) of the CGST Rules came to be omitted with effect from 08.10.2024 without any clause saving the actions initiated under the said provision. The effect of such omission was considered by the Hon’ble Bombay High Court in the case of Hikal Limited Vs. Union of India1, the Hon’ble Gujarat High Court in the case of Addwrap Packaging Private Limited Vs. Union of India & Ors2 and the Hon’ble Uttarakhand High Court in the case of M/s. Sri Sai Vishwas Polymers Vs. Union of India & Ors, dated 30.04.2025 in W.P(MB).No.103 of 2025. All the Hon’ble High Courts had taken a consistent view that the omission of Rule 96(10) of the CGST Rules without a savings clause, would nullify all the pending proceedings under Rule 96(10) of the CGST Rules.
5. Smt. Santhi Chandra, learned Standing Counsel appearing for the respondents, would submit that the removal of Rule-96(10) of the CGST Rules would not affect the pending proceedings and as such, the Judgments of the Hon’ble High Courts would not be applicable.
6. This contention would have to be rejected. The proceedings initiated under a provision of law, can be continued, even if such a provision of law is deleted from the statute book. However, such continuation would be permissible only when the omission of the provision is accompanied by a saving clause. In the present case, there is no such saving clause and as such, the pending proceedings would also stand lapsed. This observation is subject to the provisions of the General Clauses Act, 1897 and more specifically Section 6 of the General Clauses Act, 1897.
7. Following the aforesaid Judgments of various High Courts, the Writ Petitions are allowed setting aside the impugned assessment orders, dated 09.01.2025 & 17.06.2025. Consequently, any amounts recovered under the aforesaid proceedings shall be liable to be refunded to the petitioners. There shall be no order as to costs.
As a sequel, pending miscellaneous applications, if any, shall stand closed.
Notes:
1 2025 (9) TMI 806
2 (2025) 31 Centax 274 (Guj.)/2025 (98) G.S.T.L 241 (Guj.)
