Omission of Rule 96(10) without a saving clause extinguishes pending proceedings founded on it.

The petitioners challenged proceedings initiated against them for alleged contravention of Rule 96(10) of the CGST/WBGST Rules, 2017, concerning the period July 2017 to March 2022.

Rule 96(10) was omitted unconditionally with effect from 8 October 2024 by Notification No. 20/2024-Central Tax, without a saving clause.

A show-cause notice dated 25 July 2024 was issued under Section 74 of the CGST Act, 2017, followed by consequential orders dated 4 February 2025.

The GST authorities filed an affidavit-in-opposition and maintained that their actions were lawful when undertaken.

Whether proceedings initiated and continued on the basis of Rule 96(10) of the CGST/WBGST Rules, 2017 could survive after the Rule was omitted without a saving clause with effect from 8 October 2024.

Whether the show-cause notice dated 25 July 2024 and the consequential orders dated 4 February 2025, founded solely on the omitted Rule 96(10), were liable to be quashed.

The Court applied Rule 96(10) of the CGST/WBGST Rules, 2017, as omitted by Notification No. 20/2024-Central Tax with effect from 8 October 2024, and the principle that omission of a statutory provision without a saving clause ordinarily extinguishes the provision and prevents continuation of proceedings founded upon it.

It relied on the Constitution Bench decision in Kolhapur Canesugar Works Ltd. v. Union of India, (2000) 2 SCC 536, holding that proceedings under an omitted provision may continue only where the statute contains a saving provision or creates an equivalent legal fiction.

It further applied the Supreme Court’s decision in M/s Goodluck India Ltd. & Anr. v. Union of India & Ors., SLP (C) No. 24550 of 2025, which specifically held that the omission of Rule 96(10), without a saving or sunset clause, brought the relevant proceedings to an end.

The Court also considered the CBIC Office Memorandum dated 24 August 2026 directing that proceedings based on the omitted Rule 96(10) should not be initiated or pursued.

The Court held that the Supreme Court’s ruling in Goodluck India squarely governed the case.

Since Rule 96(10) had been omitted without any saving clause, and the legislative action was intended to end the complications arising from the Rule, proceedings based solely on that provision could not be continued merely because they had been initiated when the Rule was in force.

The Court accordingly rejected the authorities’ justification that their actions were valid at the time they were taken and found that the impugned notice and orders had no sustainable legal basis after the omission of Rule 96(10).

The notice and orders were quashed and set aside.

W.P.A. No. 6429 of 2025 was accordingly disposed of, with directions for issuance of an urgent certified copy upon application.