GST savings clause controls tax incentive claims where rejection ignored Section 174(2)(c) and rescission of exemption notification

Entitlement to a GST-linked tax incentive had to be examined under the savings clause in Section 174(2)(c) of the CGST Act, including its proviso on rescinded exemption notifications. Because the authority rejected the representation without considering whether the incentive had been withdrawn before the appointed day or applying the controlling statutory framework, the rejection could not stand. The HC quashed the impugned order and directed reconsideration of the representations by the competent authority within the stipulated time.

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Issues: (i) Whether the rejection of the petitioner's representation could stand when the authority did not examine the proviso to Section 174(2)(c) of the Central Goods and Services Tax Act, 2017 and the effect of rescission of the incentive notification.

Issue (i): Whether the rejection of the petitioner's representation could stand when the authority did not examine the proviso to Section 174(2)(c) of the Central Goods and Services Tax Act, 2017 and the effect of rescission of the incentive notification.

Analysis: The saving clause in Section 174(2)(c) preserves rights, privileges, obligations and liabilities accrued under the repealed or amended laws, but its proviso withdraws continuation of a tax exemption granted as an investment incentive if the notification granting it has been rescinded on or after the appointed day. The record did not show that the incentive granted to the petitioner had been withdrawn before the appointed day. The authority, while rejecting the representations, failed to consider the effect of Section 174(2)(c) and the controlling legal position on the subject.

Conclusion: The rejection order could not be sustained and was liable to be quashed; the matter required reconsideration in light of Section 174(2)(c).

Final Conclusion: The petitioner obtained quashing of the impugned rejection and a fresh decision by the competent authority on the representations, with a direction to complete the exercise within the stipulated time.

Ratio Decidendi: An authority deciding entitlement to a tax incentive after the GST regime must apply the savings provision in Section 174(2)(c) and its proviso, and a rejection that ignores this statutory framework cannot be sustained.

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