Sutlej Textiles And Industries Limited vs. Union Of INDIA

Held

The Court held that the omission of Rule 96(10) of the CGST Rules, 2017, applies to all pending proceedings as on the date of its omission, in the absence of any saving clause. The Supreme Court in M/s Goodluck India Limited & Anr. Vs. Union of India & Ors. had observed that the recommendation for prospective omission is advisory and does not bind the rule-making authority. The Court noted that the intention behind omitting the rule was to end unnecessary complications, and this intention should extend to pending proceedings. The Court disposed of the writ petitions in terms of paragraphs 7 and 8 of the Supreme Court's judgment and the subsequent Office Memorandum. The petitioners were granted liberty to file appropriate refund applications, which the competent authority would consider strictly in accordance with law within twelve weeks. No prejudice was to be caused to the petitioners due to impugned orders, and respondents were directed to decide refund applications afresh.

Facts

The petitioners, Sutlej Textiles and Industries Limited, filed writ petitions challenging the constitutional validity of Rule 96(10) of the Central Goods & Services Tax Act, 2017, as amended retrospectively. This rule denied refunds of IGST paid on exports if the supplier had availed benefits under Notification No. 41/2017-IGST. The petitions were filed before the Rajasthan High Court. During the pendency of these petitions, the Supreme Court delivered a judgment in M/s Goodluck India Limited & Anr. Vs. Union of India & Ors., which addressed the omission of Rule 96(10). Subsequently, the Central Board of Indirect Taxes and Customs (CBIC) issued an Office Memorandum accepting the Supreme Court's judgment.

Key Issues

1. Whether the omission of Rule 96(10) of the CGST Rules, 2017, by Notification No. 20/2024 with effect from 08.10.2024, would inure to the benefit of the assessees in pending proceedings, allowing their refund claims without the restriction imposed by the said sub-rule? (Question of law) Petitioner's contention: The omission of Rule 96(10) without a saving clause applies to all pending proceedings, meaning the restriction should not be applied. They relied on the principle that the effect of repealing a statute or deleting a provision is to obliterate it as if it had never existed. Revenue's contention: The omission of Rule 96(10) should be applied prospectively, as suggested by the GST Council's recommendation, and not retrospectively to pending proceedings. They relied on the Supreme Court's decision in M/s Goodluck India Limited, which considered the GST Council's recommendation.