Omission of Rule 89(4B) without a saving clause mandates lapsing of all pending refund adjudication proceedings.

In brief

The question

1. Whether the omission of Rule 89(4B) of the CGST Rules, 2017, via Notification No. 20/2024, applies to pending proceedings where final adjudication had not reached "transactions past and closed" status.

The court held

The Court held that the omission of Rule 89(4B) applies to all pending adjudications and appeals, meaning no further proceedings can be carried forward under the omitted rule.

It also directed

The Court allowed the petition, quashed the Order-in-Original dated 29.04.2025, and directed the respondents to process the Petitioner's refund claims and restore any previously rejected claims within 12 weeks. Rule was made absolute.

01Facts

The Petitioner, Alstom Transport India Limited, challenged a Show Cause Notice (SCN) and an Order-in-Original dated 29.04.2025, which denied refund claims based on Rule 89(4B) of the CGST Rules, 2017.

pp. 2-3

During the pendency of the petition, the Central Government issued Notification No. 20/2024 (dated 08.10.2024), which omitted Rule 89(4B) and Rule 96(10) of the CGST Rules.

p. 3

The Petitioner contended that since these rules were omitted without a saving clause, all pending proceedings for denial of refund based on those rules should be treated as non-est.

p. 2

02Issues

i.1. Whether the omission of Rule 89(4B) of the CGST Rules, 2017, via Notification No. 20/2024, applies to pending proceedings where final adjudication had not reached "transactions past and closed" status.

pp. 3-4 / para. 4-5

ii.2. Whether the Petitioner is entitled to the refund claims despite the prior issuance of an Order-in-Original, given the non-constitution of the GST Appellate Tribunal.

pp. 6-7 / para. 7

03Law Applied

The court primarily applied the common law principle of statutory interpretation regarding the repeal of statutes, which holds that unless a saving clause is provided, a repealed or omitted provision is treated as if it never existed, except for "transactions past and closed".

p. 5 / para. 6

The court relied on the precedent set in M/s. JJ Plastalloy Private Limited v. Union of India & Ors. (2025) and Hikal Limited & Ors. v. Union of India (Bombay High Court), which established that the omission of Rules 89(4B) and 96(10) via Notification No. 20/2024 without a saving clause causes pending proceedings to lapse.

p. 1 / para. 2 · pp. 4-6 / para. 5-6

Provisions in the judgment · 2 · Linked ones open on LawLens

Central Goods and Services Tax Act, 2017 Section 54

General Clauses Act, 1897 Section 6

04Reasoning

The court reasoned that Rule 89(4B) was omitted prospectively by Notification No. 20/2024. Following the logic in JJ Plastalloy, the court determined that "pending proceedings" include matters currently under challenge in Writ Petitions, especially where the GST Appellate Tribunal has not yet been constituted to hear appeals.

p. 4 · pp. 6-7 / para. 7

Because the Petitioner was unable to exhaust appellate remedies due to the Tribunal's absence, the impugned Order-in-Original dated 29.04.2025 could not be considered a "transaction past and closed". Consequently, the omission of the rule rendered the basis of the SCN and the subsequent order legally unsustainable, as the underlying restrictive rule (Rule 89(4B)) was effectively obliterated from the statute book for all cases not yet finalized.

p. 7 · p. 6

05Holding

The Court held that the omission of Rule 89(4B) applies to all pending adjudications and appeals, meaning no further proceedings can be carried forward under the omitted rule.

p. 4, 7

p. 7 / para. 5 · p. 7 / para. 7.1 · p. 7

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