Rule 96(10) Omitted Without Saving Clause: No Proceedings Can Be Initiated or Continued — Calcutta HC Follows Supreme Court's Goodluck India, CBIC Accepts Position

The Calcutta High Court has quashed a show cause notice and consequential orders founded on Rule 96(10) of the CGST Rules, following the Supreme Court's judgment in M/s Goodluck India Limited v. Union of India (SLP (C) No. 24550 of 2025), which categorically held that upon omission of a statutory provision without any saving clause, the provision ceases to exist in the eye of law and no proceedings can be initiated or continued on its basis. The ruling by Justice Smita Das De in WPA 3254 of 2025 (M/s Glen Industries Pvt. Ltd., decided 15.09.2026) noted that the CBIC has already accepted the Supreme Court's declaration of law and issued an Office Memorandum dated 24.08.2026 instructing field formations not to initiate or pursue proceedings based on the omitted Rule 96(10).

The petitioners had been proceeded against on the premise that they had contravened Rule 96(10), which restricted the use of ITC for payment of IGST on exports where the exporter had received supplies on which certain area-based exemption benefits had been availed by the supplier. Rule 96(10) was omitted unconditionally with effect from 08.10.2024 by Notification No. 20/2024-Central Tax. The Supreme Court, relying on the Constitution Bench decision in Kolhapur Canesugar Works Ltd. v. Union of India (2000) 2 SCC 536, held that the legislature's intention in omitting the rule without any saving or sunset clause was to bring an end to unnecessary complications once and for all, and this intention could not be read as keeping alive such complications for pending proceedings. The ASG had fairly conceded the absence of any saving clause.

The Calcutta HC took judicial notice of both the Supreme Court judgment and the CBIC memorandum, and quashed the show cause notice dated 09.01.2024 issued under Section 74 for the period July 2017 to March 2021 along with the consequential orders. The ruling is of significance to a large number of exporters across the country who had faced proceedings under Rule 96(10). The Supreme Court had directed that its order be sent to all High Courts to bring quietus to pending litigation on the subject.

- 2026-juristway.com-2492-HC(Calcutta)-GST  |  High Court of Calcutta  |  WPA 3254 of 2025  |  15.09.2026