HC quashes demand raised by Dept. as proceedings were pending before issuance of notification omitting Rule 96(10) { Aculife Healthcare (P.) Ltd. vs. Union of India [2025] 179 taxmann.com 490 (Gujarat)}
Facts:
- The petitioner was issued proceedings/demand under Rule 96(10) alleging wrongful claim of IGST refund on exports.
- Before the proceedings could be finalized, the Government omitted Rule 96(10) through a notification.
- After omission, the Department continued with the proceedings and raised demand.
- The petitioner challenged the demand before the High Court, arguing that once the Rule is omitted without any saving clause, all pending proceedings automatically lapse.
Issue
Whether the demand raised by the Department could survive when Rule 96(10) of the CGST Rules the very provision on which the demand was based had already been omitted by a later notification, and the proceedings were still pending on the date of such omission.
Held
- The High Court held that once Rule 96(10) is omitted, and there is no saving provision, the Rule is treated as if it never existed for all pending matters.
- Any notice, adjudication, or demand still pending on the date of omission cannot continue.
- Therefore, the demand raised by the Department was quashed.
- The Court clarified that it would not examine the validity or merits of Rule 96(10) because the Rule itself ceased to exist.
- Result: The petitioner is entitled to refund/benefit, and all proceedings based on the omitted Rule stand annulled.
