Omission of Rule 96(10) and Its Effect on Pending IGST Refund Claims: Analysis of Union of India Vs ABB Global Industries And Services Private Limited

Background of the Dispute

The matter in Union Of India Vs ABB Global Industries And Services Private Limited (Karnataka High Court) arose from a challenge to denial of refund of Integrated Goods and Services Tax (IGST) paid on export of services for the month of December 2019.

The assessee had sought refund of 29,57,43,039/- of IGST paid on export of services. The claim was rejected by the authorities by invoking Rule 96(10) of the **Central Goods and Services Tax Rules, 2017** (CGST Rules) read with Section 54 of the **Central Goods and Services Tax Act, 2017** (CGST Act`).

Aggrieved, the assessee approached the Karnataka High Court in Writ Petition No. 23839/2023 (T-RES), where it:

  • Questioned the validity and application of Rule 96(10) of the CGST Rules; and
  • Challenged the order-in-appeal dated 28.08.2023 passed by the Commissioner, Central Tax (Appeals) [CCT(A)] upholding rejection of refund.

The learned Single Judge, by order dated 09.12.2025, allowed the writ petition and directed grant of refund of 29,57,43,039/- of IGST to the assessee.

The Union of India (Revenue) filed an appeal before the Division Bench of the Karnataka High Court against this order. There was a delay of 148 days in filing the appeal, for which an interlocutory application was moved. The Court condoned this delay by allowing I.A. No. 2/2026.

Core Controversy: Prospective Effect of Omission of Rule 96(10)

During the pendency of the original writ proceedings, Rule 96(10) of the CGST Rules was omitted by a notification dated 08.10.2024.

The central point of dispute before the High Court in the appeal was:

  • Whether the omission of Rule 96(10) would affect refund proceedings relating to periods prior to 08.10.2024; and
  • Whether refund claims already rejected or pending could still be regulated by an omitted provision in the absence of an express saving or sunset clause.

The Revenue argued that:

  • The notification omitting Rule 96(10) was intended to operate only prospectively;
  • Consequently, refund claims relating to earlier tax periods such as December 2019 must continue to be governed by Rule 96(10) as it stood during that time; and
  • The Single Judge’s reliance on the deletion to grant refund was, therefore, not sustainable.

The assessee supported the Single Judge’s order and contended that once Rule 96(10) stood omitted without a saving clause, it could not form the basis for denying refund, even in pending or earlier period matters.

Findings of the Learned Single Judge

The learned Single Judge had followed an earlier decision of the Karnataka High Court in:

M/s Hikal Limited vs. Union of India and others — Writ Petition No. 15251/2020, dated 09.12.2025

In that decision, the Court had already considered the legal implications of the omission of Rule 96(10) and granted relief to the assessee. Relying on that precedent, the Single Judge in Writ Petition No. 23839/2023 (T-RES) directed that the refund of 29,57,43,039/- be allowed to the present assessee.

The Revenue, in appeal, sought to challenge the correctness of that approach, particularly in light of subsequent developments in Supreme Court jurisprudence.

Supreme Court Precedent Relied Upon: Goodluck India Limited

At the appellate stage, counsel for the Revenue produced a recent judgment of the Supreme Court in:

Goodluck India Limited and Another vs. Union of India and others — 2026 SCC OnLine SC 1523

In this decision, the Supreme Court considered the exact question of what happens to proceedings initiated or continued under a statutory rule that is subsequently omitted.

The Supreme Court applied the Constitution Bench ruling in:

Kolhapur Canesugar Works Ltd. v. Union of India — (2000) 2 SCC 536