TaxTMI 
TaxTMI 
2025 (9) TMI 806
X X X X Extracts X X X X
X X X X Extracts X X X X
....2 and others - -<br>GST<br>M.S. SONAK & JITENDRA JAIN, JJ. WRIT PETITION NO. 78 OF 2025 WITH WRIT PETITION NO. 465 OF 2021, WRIT PETITION NO. 2828 OF 2021, WRIT PETITION NO. 3691 OF 2021, WRIT PETITION NO. 405 OF 2021, WRIT PETITION NO. 2044 OF 2022, WRIT PETITION NO. 3163 OF 2021, WRIT PETITION (L) NO. 8737 OF 2022, WRIT PETITION NO. 1773 OF 2024, WITH WRIT PETITION NO. 4640 OF 2022 WITH CHAMBER ORDER (CHOL) NO. 286 OF 2022 IN WRIT PETITION NO. 4640 OF 2022, WRIT PETITION (L) NO. 11740 OF 2025, WRIT PETITION NO. 2745 OF 2025, WRIT PETITION (L) NO. 15183 OF 2024, WRIT PETITION NO. 2097 OF 2025, WRIT PETITION NO. 3522 OF 2024, WITH WRIT PETITION NO. 3013 OF 2023 WITH INTERIM APPLICATION (L) NO. 31922 OF 2023 IN WRIT PETITION NO. 3013 OF 2023, WRIT PETITION NO. 2052 OF 2025, WRIT PETITION (L) NO. 39729 OF 2022, WRIT PETITION NO. 6795 OF 2023, WRIT PETITION NO. 1493 OF 2025, WITH WRIT PETITION NO. 1006 OF 2024 WITH INTERIM APPLICATION NO. 7229 OF 2025 IN WRIT PETITION NO. 1006 OF 2024, WRIT PETITION NO. 12927 OF 2022, WITH WRIT PETITION NO. 739 OF 2025 WITH INTERIM APPLICATION NO. 11291 OF 2025 IN WRIT PETITION NO. 739 OF 2025, WRIT PETITION NO. 674 OF 2024, WRIT PETITION NO. 1325 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Intelligence, Kolkata Zonal Unit-8, The State of Maharashtra, Commissioner of Central Goods and Service Tax, Mumbai, Commissioner of State Goods and Service Tax, Mumbai, Principal Additional Director General, Directorate General of GST Intelligence, Deputy Director, Directorate General of GST Intelligence, Mumbai Zonal, Senior Intelligence Officer, Directorate General of GST Intelligence, Mumbai Zonal Unit, Deputy Commissioner of Customs, Joint Director, Directorate General of Goods & Services Tax Intelligence Mumbai, Intelligence Officer, Group A, Superintendent/ Appraiser/ Senior Intelligence Officer, Additional Director General, Superintendent of Customs, IGST (R) (X), Mumbai, Anti Evasion Wing. W. P. No. 78 / 2025 For the Petitioner: Mr. V. Shridharan, Senior advocate a/w Mr. Sahil Parghi, Mr. Dhananjay Sethuraj and Ms. Vidhi Jain i/by Sriram Sridharan. For the Respondent No. 1: Mr. J. B. Mishra a/w Mr. Ashutosh Mishra a/w Mr. Rupesh Dubey i/by A. A. Ansari, For the Respondents No. 2 to 6: Mr. Karan Adik a/w Mr. Abhishek R. Mishra a/w Ms. Sangeeta Yadav, Ms. Maya Majumdar a/w Mr. Rupesh Dubey. W.P. No. 465 / 2021 For the Petitioner Mr. Abhishek A Rastogi, Ms....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dvocate, Mr. Sahil Parghi, Mr. Dhananjay Sethuraj and Ms. Vidhi Jain i/by Sriram Sridharan for the Petitioners Ms. P. S. Cardozo a/w Ms. Niyati Mankad a/w Ms. Priyanka Singh for the Respondents W.P. No. 2745 / 2025 Mr. Vishal Agarwal a/w Ms. Yashashvi Jain for the Petitioners Mr. Jitendra B. Mishra, Ms. Sangeeta yadav, Ms. Niyati Mankad, Mr. Ashutosh Mishra Mr. Rupesh Dubey Ms. Priyanka Singh Ms. Jaymala Ostwal a/w Ms Niyati Mankar (thr. VC) for the Respondents. W.P. (L) No. 15183/2024 Dr. Avinash Poddar, Ms. Deepali Kamble a/w Ms. Anchal Poddar for the Petitioner Mr. J. B. Mishra, Ms. Sangeeta Yadav, Mr. Ashutosh Mishra a/w Mr. Rupesh Dubey for the Respondent W.P. No. 2097/2025 Mr. V. Sridharan, Senior Advocate, Mr. Sahil Parghi, Mr. Dhananjay Sethuraj and Ms. Vidhi Jain i/by Sriram Sridharan for the Petitioner Mr. Satyaprakash Sharma a/w Mr Saket R Ketkar, Ms. Sangeeta Yadav Ms. Harpreet Kaur for Respondent No. 4 & 5 W.P. No. 3522 / 2024 Mr. Prakash Shah, Senior Advocate, Mr. Jas Sanghavi, Mr. Suyog Bhave, Ms. Linzy Sharan i/by PDS Legal for the Petitioner Mr. Satyaprakash Sharma, Mr. Abhishek Mishra for the Respondent No. 2 to 5 W.P. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r Respondent. WP/1614/2025 Mr. Yogesh S. Patki a/w Mr. Simon Mascarenhas i/b Mulla & Mulla & Craigie Blunt & Caroe, for the Petitioner. Ms. Maya Majumdar, Mr. Harshad Shingapurkar, Adv. Soutrik Kar, Mr. Ritik Gupta, Adv. for Respondent WP/4658/2025 Mr. Stebin Mathew i/b Ms. Dishya Pandey, Advocate for the Petitioner. Mr. Satyaprakash Sharma a/w Ms. Megha Bajoria, Adv. Harpreet Kaur Sethi, for Respondent No. 2 & 3. Ms. Sangeeta Yadav, Adv. for Respondent. WP/5816/2025 Mr. Prakash Shah, Senior Advocate a/w Mr. Jas Sanghavi, Mr. Mihir Mehta, Mr. Mohit Rawal i/b PDS Legal, for the Petitioner. Mr. Karan Adik a/w Adv. S. D. Deshpande, Adv. for Respondent WP/5815/2025 Mr. Prakash Shah, Senior Advocate a/w Mr. Jas Sanghavi, Mr. Mihir Mehta, Mr. Mohit Rawal i/b PDS Legal, for the Petitioner. Mr. Karan Adik a/w Adv. S. D. Deshpande, Adv. for Respondent WP(st)/15698/2025 Mr. Prakash Shah, Senior Advocate a/w Mr. Jas Sanghavi, Mr. Kshitij Viswanath, Ms. Linzy Sharan i/b PDS Legal, for the Petitioner. Mr. Karan Adik a/w Ms. Sangeeta Yadav, Mr. Abhishek R. Mishra and Mr. Satyaprakash Sharma a/w Sangeeta Yadav, Adv. for Respondent No. 2 to 4 and 5, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uju R. Thakkar a/w Ms. Niyati Mankad (thr. VC) Mr. Priyanshu V. Doshi, for Respondent No. 2 & 3. JUDGMENT: (PER M. S. SONAK, J.) 1. Heard learned Counsel for the parties. 2. Rule in each of the Petitions. The Rule is made returnable immediately at the request and with the consent of the learned Counsel for the parties. 3. Since substantially common issues of law and fact arise in these Petitions, the learned Counsel for the parties agree that a common order could dispose of these Petitions. 4. The learned counsel for the parties agreed that Writ Petition No.78 of 2025, instituted by Hikal Limited, be treated as the lead Petition for the disposal of this batch of Petitions. Accordingly, we propose to treat this Petition as the lead Petition. THE CHALLENGE IN THESE PETITIONS. 5. The challenge in most of these Petitions is to Rule 89 (4B) and/or 96(10) of the Central Goods and Service Tax Rules, 2017 (CGST Rules). Upon the omission of these Rules (impugned Rules) vide Notification dated 08 October 2024, notifying The Central Goods and Service Tax (Second Amendment) Rules, 2024 (2024 Amendment Rules), the Petitioners, without prejudice to their challenge to the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cture of chemical intermediates, speciality chemicals and active pharmaceutical ingredients used in both human and animal healthcare. The Petitioner has pleaded that it operates through two manufacturing units: - (a) Taloja, Raigad (a 100% Export Oriented Unit) wherein the Petitioner imports raw materials duty-free under Notification No. 78/2017-Customs dated 13.10.2017 and exports nearly 90% of its finished goods. The remaining 10% is cleared domestically. (b) Mahad, Raigad (Domestic Tariff Area unit) for which the Petitioner procures raw materials, inter alia, under Advance Authorisation licenses and avails IGST exemption under Notification No. 79/2017-Customs dated 13.10.2017. In some cases, the Petitioner also undertakes the import of goods on payment of IGST. 11. The Petitioner has pleaded that the finished goods manufactured by the Petitioner are either exported, with or without the payment of IGST, or sold domestically. On exports made with payment of IGST, the Petitioner claimed a refund under Section 54 of the CGST Act, read with Section 16 of the IGST Act. These refunds were duly sanctioned to the Petitioner. The Department did not challenge the refun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....de on payment of IGST for the period before 09 October 2018 did not even remotely violate any of the conditions prescribed under Rule 96(10). The challenge was also raised to the invocation of the extended period of limitation under Section 74 of the CGST Act, in the absence of any allegation of fraud, willful misstatement or suppression of facts to evade any tax. 18. In short, the main issues involved in the lead Petition relate to the constitutional validity of the impugned Rules and, in any event, to the lapse of pending proceedings consequent upon the repeal or omission of the impugned Rules, which, the Petitioners contend, were not backed by any savings clause. PETITIONERS CONTENTIONS 19. Mr Sridharan, learned Senior Counsel appearing for the Petitioner in the lead Writ Petition No. 78 of 2025, and the other learned Counsel appearing on behalf of the Petitioners, advanced several contentions questioning the constitutional validity of Rules 89(4B) and 96(10) of the CGST Rules. They submitted that these Rules were ultra vires the parent Act and, in any event, they were affected by the vice of manifest arbitrariness. They submitted that the effect of the said Rules was g....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r repeal by Rules. He submitted that the 2024 Amendment Rules or the CGST Act also did not contain any savings clause to save pending proceedings consequent upon the omission of the impugned Rules. He referred to a list of almost 64 Notifications issued by the Central or State Government, amending or omitting Rules which had provided for express saving clauses. He submitted that the absence of any savings clause in the Notification dated 08 October 2024 was conspicuous and deliberate. 23. Accordingly, Mr Sridharan submitted that the common law principle that an omitted or repealed provision is entirely obliterated from the statute book, as if it had never been enacted, applies with full force to the present case, except regarding "transactions past and closed". He submitted that the impugned show cause notices or orders issued thereon, citing non-compliance with the omitted or repealed Rules, are invalid and cannot be enforced. He relied upon the decisions of the Constitution Bench in the case of Rayala Corporation (P) Ltd. Vs Director of Enforcement (1969) 2 SCC 412, Kolhapur Cane Sugar Works Ltd. And Anr. Vs Union of India (2000) 2 SCC 536, Fibre Boards (P) Ltd. Vs Commissione....
X X X X Extracts X X X X
X X X X Extracts X X X X
....learned Counsel for the Petitioners in the other Petitions substantially adopted the arguments advanced by Mr Sridharan. Some of the learned Counsel contended that the Petitioners they represent cannot be denied a refund of the amounts that were coercively recovered from them by citing the violation of the impugned Rules. RESPONDENTS' COUNTER 28. The learned Counsel for the Respondents, at the outset, submitted that there was nothing unconstitutional or ultra vires in so far as Rules 89(4B) and 96(10) of the CGST Rules were concerned. They submitted that the striking down of Rule 96(10) by the Kerala High Court would not preclude this Court from upholding the validity of the said Rules. They submitted that the impugned Rules were a fiscal measure, and greater latitude should be shown to the Rule-Making Authorities in such matters. Accordingly, they submitted that the challenge to the constitutionality of the impugned Rules or the argument that the impugned Rules were ultra vires the parent Act must be rejected. 29. The learned Counsel for the Respondents submitted that Section 6 of the General Clauses Act was applicable because the 2024 Amendment Rules were enacted in exer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ourt to grant any retrospective effect to the Rules by accepting the Petitioners' arguments. 33. The learned Counsel for the Respondents submitted that the Goods and Services Tax Council, whose recommendations led to the enactment of the 2024 Amendment Rules, had clarified that the omissions in the impugned Rules were to operate prospectively. They further argued that Rule 1(2) itself functions as a savings clause, and therefore, the common law principle relied upon by the Petitioners would not apply in this case. 34. The learned Counsel for the Respondents relied upon Section 166 of the CGST Act to submit that the savings clause therein saves all pending post the omission or repeal of the impugned Rules. They pointed out that the 2024 Amendment Rules were laid before the parliament. Mr Adik went to the extent of submitting that until the parliament approved such Rules, they did not even enter into force. They submitted that in any event, the savings clause in Section 166 was sufficient to protect the pending proceedings. 35. Mr Subir Kumar submitted that the impugned show cause notices were issued under Section 73 of the CGST Act, read with Section 20 of the IGST Act, 201....
X X X X Extracts X X X X
X X X X Extracts X X X X
....T Act and should therefore, be regarded as, a "Central Act" for purpose of Section 6 of the General Clauses Act, was, to some extent, accepted by the Full Bench of the Gujarat High Court in the case of Saurashtra Cements and Chemical Industries Ltd. Vs. Union of India (1995) 79 E.L.T. 367 and by the Division Bench of Karnataka High Court in Falcon Tyres Limited Vs. Union of India (1992) 60 E.L.T. 166. However, these decisions were expressly overruled by the Constitution Bench in Kolhapur Canes Sugar Works Ltd (supra). He submitted that the decisions in the case of M/s. High Point Hotels Pvt. Ltd. (supra) and Laxmi Board and Paper Mills Pvt. Ltd. (supra), which take the same view as in Saurashtra Cements (supra) and Falcon Tyres Ltd. (supra), also run counter to the decision of the Constitution Bench in Kolhapur Canes Sugar Works Ltd. (supra). 41. For all the above reasons, Mr. Sridharan and the other learned Counsel for the Petitioners in this batch of Petitions submitted that the Rule in all these Petitions may be made absolute. ISSUES FOR DETERMINATION 42. Based on the pleadings and rival contentions, the following main issues arise for determination in this batch of Pet....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t or even the Rules made thereunder, one of the salutary principles is that a Constitutional Court must not embark upon such an examination only because it can or it is empowered to do so. Such vital questions must be examined only if it is necessary to do so, and a Petitioner's grievance cannot be suitably redressed without addressing such an issue of constitutional validity of a statute or the Rules framed under the statute. 45. Ordinarily, a Court should not decide issues of constitutional validity of statutes or rules unless they are absolutely necessary and the case at hand cannot be disposed of without dealing with and resolving such issues. The Hon'ble Supreme Court has held in several cases that academic exercise in constitutional law is not for Courts but for jurists, and the Court should not enter into such issues and interpret them unless it is really necessary. Therefore, if a Petition can be disposed of on any other issue by granting at least substantially the relief which the Petitioner seeks without examining the constitutional validity of a statutory provision or even the rules made thereunder, then the Constitutional Court should not rush to examine and decide o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e 226(2) of the Constitution of India, such order, will have effect throughout the territory of India, subject of-course to the applicability of the Act. 51. Following Kusum Ingots & Alloys Ltd. (supra) the Coordinate Bench of this Court comprising Abhay S Oka, J (as His Lordship then was) and C V Bhadang, J held that the striking down of Section 10-A(1) of the Divorce Act, 1869 by the Division Bench of the Kerala High Court in the case of Saumya and Thomas (supra), would have effect throughout the territory of India. Therefore, the Family Court at Bandra, Maharashtra, could not have ignored the striking down of Section 10-A (1) of the Divorce Act by the Kerala High Court, on the ground that such a decision was not binding upon the Courts and Authorities in the State of Maharashtra. 52. In Commissioner of Income-Tax, Vidarbha (supra), another Coordinate Bench of this Court, comprising Kantawala, CJ and Chandurkar, J (as His Lordship then was), rejected the contention that the striking down of Section 140-A(3) of the Income Tax Act by the Madras High Court in the case of A.M. Sali Maricar And Anr. Vs Income-Tax Officer And Anr (1973) 90 ITR 116 was not binding upon the Income ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... CGST Rules, until the said Rule was omitted vide Notification dated 08 October 2024. 56. We have also noted how, at least two Coordinate Benches of this Court in the case of Godavari Devi Saraf (supra) and Lancy Leo Mendonca & Ors Vs Union of India & Ors 2015 SCC OnLine BOM 5743 have taken a view that supports the contention of the Petitioners, though another Coordinate Bench in the case of Thana Electricity Supply Ltd (supra) may have taken a slightly different view in the matter. 57. Accordingly, we once again clarify that in this batch of Petitions we are not addressing the issue of Rules 89(4B) and 96(10) of the CGST Rules being ultra vires the parent act or otherwise unconstitutional, null and void because, for reasons discussed hereafter, we are satisfied that these Petitions should succeed on the ground of the effect of omission of the said two Rules, without any effective savings clause to protect the pending proceedings. LEGAL EFFECT OF THE OMISSION OR REPEAL OF THE IMPUGNED RULES WITHOUT PROTECTION OF ANY SAVINGS CLAUSES OR SECTION 6 OF THE GENERAL CLAUSES ACT (SECOND ISSUE) 58. The Central Government, in the exercise of powers conferred upon it by Section 16....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(4A) or (4B) or both" shall be omitted. 10. In the said rules, in rule 96, sub-rule (10) shall be omitted. 11. ..................................... 12. ..................................... 13. ..................................... 14. ..................................... 15. ..................................... 16. ..................................... 17. ..................................... 18. ..................................... 19. ..................................... 20. ..................................... 21. ..................................... 22. ..................................... Form GST SPL-01, 01 to 08 Note: The principal rules were published in the Gazette of India. Extraordinary, Part II. Section 3, Sub-section (i) vide number G.S.R. 610(E), dated the 19th June. 2017 No. 3/2017-Central Tax. dated the 19th June, 2017 and were last amended vide notification number G.S.R. 376 (E). dated the 10th July 2024 No. 12/2024-Central Tax. dated the 10th July 2024. 59. From the above, it is indisputable that the impugned rules sta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing litigation. 63. In Gammon India Ltd (supra), the Hon'ble Supreme Court, after referring to the various commentaries, accepted the common law principle that a repeal or an omission (without any savings clause) is to obliterate the statute from the statute book and any proceedings which have not culminated in a final judgment prior to the repeal are abated at the consummation of the repeal. However, it was also observed that where the repeal does not contemplate either a substantial common law or a statutory right, but merely the procedure prescribed to secure the enforcement of the right, then the right itself is not annulled but remains in existence, enforced by applying the new procedure. 64. In the present batch of Petitions, it was not even argued that the provisions in Rule 89(4B) and 96(10) of the CGST Rules were not substantive provisions affecting the rights of importers and exporters. In any case, a review of these Rules makes it clear that they are not purely procedural but impact substantive rights of the parties. Therefore, the removal or repeal of Rules 89(4B) and 96(10) would essentially erase these Rules from existence as if they had never been enacted or pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... were entitled to maintain refund claims for IGST paid for the export of goods. 68. In Keshavan Menon Vs State of Bombay (supra), the expression and concept of "transactions past and closed" was explained in the context of repeal of an Act in paragraph Nos. 11, 12 and 14, which are transcribed below for the convenience of reference: - "11. This statement of law by Craies was referred to with Approval and adopted by the F. C. in J. K. Gas, Plant Manufacturing Co., (Rampur), Ltd. v. Emperor, (1947) F.C.R. 141 at p. 166: (A. I. R. (34) 1947 F.C. 38:48 Cr. L. J. 886). As to the effect of the repeal of an Act, the following passage from Craies' book seems to sum up the legal position as it obtained in England before the enactment of the Interpretation Act of 1889 : 'When an Act of Parliament is repealed," said Lord Tenterden in Surtees v. Ellison, (1829) 9 B. and C. 750 at p. 752: (7 L. J. K. B. 335), "it must be considered (except as to transactions past and closed) as if it had never existed. That is the general rule." Tindal C. J. states the exception more widely. He says (in Kay v. Goodwin, (1830) 6 Bing. 576: (8 L.J.C.P. 212): "The effect of repealing a sta....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... SAVES THE PENDING PROCEEDINGS (FOURTH ISSUE) 69. Section 6 of the General Clauses Act reads as follows: - "6. Effect of repeal.-Where this Act, or any [Central Act] or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not- (a) revive anything not in force or existing at the time at which the repeal takes effect; or (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be impos....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... therein constitute obiter dictum, given the decisions in Fibre Boards Pvt Ltd (supra) and Shree Bhagwati Steel Rolling Mills (supra), is, with respect, misconceived. The latter two decisions of the Hon'ble Supreme Court only hold that the observations in Rayala Corporation Pvt Ltd (supra) to the effect that there is a difference between an "omission" and "repeal" and that the provisions of Section 6 apply only to a "repeal" and not to an "omission" constitute an obiter dictum. 75. However, the ratio decidendi of Rayala Corporation Pvt Ltd (supra) continues to be that a repeal of any enactment otherwise than by the General Clauses Act, a Central Act or a regulation as defined under Section 3(50) of the General Clauses Act, 1897 would not attract the provisions of Section 6 of the General Clauses Act, 1897. The latter two decisions, in fact, held that the Constitution Bench, having concluded that Section 6 of the General Clauses Act was not applicable to a "repeal" by a Rule, should not have gone further and commented on the distinction between an omission and the repeal. The observations regarding the distinction only were therefore held to be obiter dictum and departed from. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erate it from the statute-book as completely as if it had never been passed, and the statute must be considered as a law that never existed. To this rule, an exception is engrafted by the provisions of Section 6(1). If a provision of a statute is unconditionally omitted without a saving clause in favour of pending proceedings, all actions must stop where the omission finds them, and if final relief has not been granted before the omission goes into effect, it cannot be, granted afterwards. Savings of the nature contained in Section 6 or in special Acts may modify the position. Thus the operation of repeal or deletion as to the future and the past largely depends on the savings applicable. In a case where a particular provision in a statute is omitted and in its place another provision dealing with the same contingency is introduced without a saving clause in favour of pending proceedings then it can be reasonably inferred that the intention of the legislature is that the pending proceedings shall not continue but fresh proceedings for the same purpose may be initiated under the new provision. 38. In the present case, as noted earlier, Section 6 of the General Clauses Act h....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by Mr Karan Adik, notes that the main purpose of Section 6 of the General Clauses Act was to overturn the common law rule that a repeal nullifies the statute for all future purposes. Ultimately, the Law Commission itself concluded that the section was quite comprehensive in its scope and content, and it did not see a need for any changes (see paras 6.2 and 6.8). 81. Therefore, by focusing on a single line in paragraph 1.18 of the Law Commission Report, which states that there can be no better testimony to the utility of the General Clauses Act than the fact that the Courts have, on considerations of equity, justice, and good conscience, extended its principles not only to subordinate legislation but also to private documents, we are not prepared to hold that the provisions of Section 6 of the General Clauses Act, as they currently stand, would cover the case of an omission or a repeal of subordinate legislation caused by another subordinate legislation. Such an interpretation would run counter to the two Constitution Bench decisions of the Hon'ble Supreme Court. 82. Consequently, based upon the provisions of Section 6 of the General Clauses Act, 1897, the Respondents cannot ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Rule had not been deleted or omitted, then such proceedings will continue. If the case is covered by Section 6 of the General Clauses Act, 1897, or there is a pari materia provision in the statute under which the Rule has been framed, in that case also, the pending proceeding will not be affected by the omission of the Rule. In the absence of any such provision in the statute or in the Rule, the pending proceedings would lapse on the Rule under which the notice was issued or proceedings were initiated being deleted/omitted. 86. We have considered the decisions in Highpoint Hotels Pvt Ltd (supra) and Laxmi Board and Paper Mills Pvt Ltd (supra). At the time when Laxmi Board and Paper Mills Pvt Ltd (supra) was decided, the Coordinate Bench did not have the benefit of the decision of the Constitution Bench in Kolhapur Cane Sugar Works Ltd (supra). The decision in Laxmi Board and Paper Mills Pvt Ltd (supra) takes a view which does not align with the view taken by the Constitution Bench in Kolhapur Cane Sugar Works Pvt Ltd (supra). Similarly, with respect, we believe that even the decision of the learned Single Judge of the Karnataka High Court in the case of Highpoint Hotels Pvt Lt....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Pvt Ltd (supra) and Kolhapur Cane Sugar Works Ltd (supra). 90. Therefore, the argument that the Notification dated 08 October 2024 or the Central Goods and Service Tax (Second Amendment) Rules, 2024 must be regarded as "Central Act" for the purposes of Section 6 of the General Clauses Act only because such rules were enacted in the exercise of powers conferred upon the Central Government by Section 164 of the CGST Act cannot be accepted. Similar contentions seeking to elevate rules framed under a Central Act to the status of a Central Act have been expressly rejected by the Constitution Bench. THE ARGUMENT BASED ON SECTION 174(3) OF THE CGST ACT (SIXTH ISSUE) 91. Section 174 of the CGST Act is concerned with 'Repeal and Saving'. Section 174(1) repeals the Acts specifically referred to therein. Section 174(2) provides that the repeal of the specified Acts and the amendment of the Finance Act, 1994, to the extent mentioned in sub-Section (1) or Section 173 shall not, inter alia, affect pending proceedings. Thus, while Section 174(1) repeals the specified enactments, Section 174(2) saves the pending proceedings or any actions that might have been taken under the repealed ena....
X X X X Extracts X X X X
X X X X Extracts X X X X
....THE ARGUMENT BASED ON CLAUSE 1(2) OF THE NOTIFICATION DATED 08 OCTOBER 2024 (SEVENTH ISSUE) 96. The learned Counsel for the Respondents then argued that Clause 1(2) of the notification dated 08 October 2024 should be interpreted as a savings clause. They argued that this clause grants prospective effect to the omission of Rules 89(4B) and 96(10). They also relied on the minutes of the GST Council and the observation therein that the omission of these Rules was intended to be prospective and not retrospective. 97. Clause 1(2) only provides that the CGST (Second Amendment) Rules, 2024, would come into effect from the date of their publication in the official gazette, i.e., on 08 October 2024. The issue with which we are concerned is not of prospectivity or retrospectivity. The issue with which we are concerned is the effect of such omission or repeal of Rules 89(4B) and 96(10) without there being any savings clause to protect or save pending proceedings. 98. As noted earlier, even if the two Rules are omitted on 08 October 2024, the common law Rule that such Rules are completely obliterated or treated as never having been enacted will apply in the absence of any savings clau....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sed in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or regulation or in the notification, as the case may be, or both Houses agree that the rule or regulation or the notification should not be made, the rule or regulation or notification, as the case may be, shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation or notification, as the case may be." 103. M P Jain & S N Jain in "Principles of Administrative Law", 8th edition, in Chapter 5, dealing with legislative and other controls over delegated legislation, have referred to the "laying procedure" at paragraph 5.1.2 (pages 160 to 164). At sub-paragraph (iii), the authors have observed as follows: - "(iii) There is a third variety of laying procedure, viz., laying with a negative procedure. This formula envisages that the legislature may annul the draft ru....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ogy used is "as soon as may be" after the rules are made. In practice, often the rules are laid long after they are made. This reduces the effectiveness of the Parliamentary control over delegated legislation^1. The laying formula as contained, in the above provision is regarded as being of directory nature and not mandatory." 104. From the above, or even otherwise from the plain reading of Section 166 of the CGST Act, firstly, it is not possible to accept the contention that the notification dated 8 October 2024 was not effective until the Rules were laid before the Parliament and approved by the Parliament through a resolution. Such a contention is neither borne out by the plain reading of Section 166 of the CGST Act, nor do any precedents support such a construction. Such a construction entirely ignores the expression "thereafter" in Section 166. Such a construction would, in fact, render a savings clause, upon which the Respondents rely, completely otiose or redundant. If the Rules were to come into force only after the Parliament approved them, there was no question of doing or saving anything previously done under such Rules. 105. An Analysis of Section 166 wou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the CGST Act, insofar as the requirement of laying before the parliament is concerned, are only directory and not mandatory. 110. In Veneet Agrawal Vs Union of India & Ors (2007) 13 SCC 116, the Hon'ble Supreme Court was concerned with an identical provision in Section 31 of the Securities and Exchange Board of India Act, 1992. The allegation was about non-compliance, since the Rules and Regulations which were impugned had not been laid before the house for the period stipulated under the said Section. The Hon'ble Supreme Court, after relying upon Atlas Cycle Industries Ltd (supra) and several other decisions, held that such a provision was not mandatory but only directory. Costs were imposed on the Petitioners because such contentions were being repeatedly raised even though the same had been rejected in a series of past decisions. MISCELLANEOUS 111. As noted above, the decision of the Gujarat High Court in Messers Addwrap Packaging Pvt. Ltd. (supra) and of the Uttarakhand High Court in Sri Sai Vishwas Polymers (supra) also take the view that the repeal of the impugned Rules vide Notification dated 08 October 2024 is neither backed by any savings clauses nor do the prov....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Act. Besides, we are also not concerned with repeal followed by re-enactment for the provisions of Section 24 of the General Clauses Act to be applicable. Therefore, the decision in Vianaar Homes Pvt. Ltd. (supra) can be of no assistance to the Respondents in these matters. 115. In Jayanthilal Amarathlal (supra), relied upon by Mr. Subir Kumar, the Hon'ble Supreme Court held that the provisions of Section 6 of the General Clauses Act apply to a repeal of Gold (Control) Ordinance, 1968 as the re-enacted Gold (Control) Act does not exhibit a difference or a contrary intention, the proceedings initiated under the repealed law must be held to continue. That is not the issue in any of these matters, and therefore, based upon Jayanthilal Amarathlal (supra), the Petitioners cannot be denied the relief that they seek in these Petitions. 116. The 2024 Amendment Rules or the CGST Act do not include any savings clause to protect pending proceedings resulting from the omission of the impugned Rules. Mr Sridharan referenced a list of nearly 64 Notifications issued by the Central or State Government, which amended or omitted Rules and included explicit savings clauses. This indicates that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efore, based upon Chandpaklal Ramanlal Shah (supra), the relief claimed by the Petitioners cannot be denied. 120. In Milton Polyplas (I) Pvt. Ltd. (supra), the Court found that a saving clause was indeed provided. However, the CESTAT ignored the savings clause as well as the provisions of Section 6 of the General Clauses Act on the premise that they apply only to a repeal or not to an omission of any Central Act or Regulation. Since this position was contrary to the law laid down in the case of Fibre Boards Pvt. Ltd. (supra) and Shree Bhagwati Steel Rolling Mills (supra), this Court answered the substantial question of law in favour of the revenue and against the assessee. Such an issue is not involved in the present batch of matters. Neither party have argued that there is any distinction between an omission and a repeal in the context of the applicability of section 6 of the General Clauses Act. 121. In the case of State of Punjab Vs Mohar Singh (supra), the issue concerned the application of Section 6 of the General Clauses Act to an Ordinance. Again, that is not the issue involved in any of these Petitions. RELIEFS 122. Upon comprehensive review of all the above asp....