Gujarat High Court Quashes SCN and Order Passed Under Omitted Rule 96(10) of CGST Rules

Case Overview

Case Name: MAC Industry Vs Union of India & Anr.
Court: Gujarat High Court
Application Number: R/Special Civil Application No. 1693 of 2026
Date of Order: 03/09/2026

The Gujarat High Court, in the matter of MAC Industry Vs Union of India & Anr., allowed a writ petition challenging a show cause notice (SCN) dated 26.03.2025 and a consequential order dated 09.06.2025, both of which were premised on Rule 96(10) of the Central Goods and Services Tax Rules, 2017 — a provision that had already been omitted prior to the issuance of either document.

Background of the Dispute

The petitioner, MAC Industry, approached the Gujarat High Court seeking relief against proceedings initiated by the Revenue authority. The core grievance was that the department had issued an SCN on 26.03.2025 purportedly invoking Rule 96(10) of the CGST Rules, 2017, despite the fact that this sub-rule had been expressly omitted vide Notification No. 20/2024 with effect from 08.10.2024 — nearly five months before the notice was even issued.

A consequential order was thereafter passed on 09.06.2025, also relying on the same omitted provision.

The petitioner sought the following reliefs before the Court:

"Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other writ, order or direction quashing and setting aside the impugned SCN dated 26/03/2025 (annexed at Annexure 'A') issued by the 2nd Respondent as well as the impugned order dated 09/06/2025 (annexed at Annexure 'B') passed by the 2nd Respondent as being arbitrary, illegal, excessive and wholly without jurisdiction."

The principal legal question before the Court was whether the omission of Rule 96(10) of the CGST Rules through Notification No. 20/2024 (effective 08.10.2024) would inure to the benefit of assessees in pending or subsequently initiated proceedings — particularly those involving claims for refund of integrated tax paid on exports of goods and services.

A related question was whether, in the absence of a saving clause or a sunset clause accompanying such omission, the deleted provision could continue to govern pending proceedings.

Supreme Court's Ruling in Goodluck India Limited & Anr. Vs Union of India & Ors.

At the very outset of the hearing, the petitioner's counsel drew the Court's attention to the binding decision of the Supreme Court in Goodluck India Limited & Anr. Vs Union of India & Ors. — 330/112 GSTL 3 (SC) / 2026 SCC OnLine SC 1523, contending that the controversy stood conclusively settled by that ruling. The Senior Standing Counsel appearing for the Revenue was unable to dispute the applicability of the Supreme Court's decision to the facts at hand.

The Supreme Court, in Goodluck India, had addressed the precise issue of the effect of omission of Rule 96(10) without any legislative saving mechanism. The relevant observations of the Apex Court read as follows: