Lakshmikumaran & Sridharan Secures landmark Bombay High Court Ruling Quashing GST Proceedings Under Omitted Rules 96(10) And 89(4B)

Lakshmikumaran & Sridharan secures landmark Bombay High Court ruling quashing GST proceedings under omitted Rules 96(10) and 89(4B)

The leading law firm in India, Lakshmikumaran & Sridharan successfully represented petitioners in a landmark judgment delivered by the Hon’ble Bombay High Court in Hikal Limited v. Union of India & Ors. (W.P. No. 78 of 2025). The Court allowed a batch of writ petitions filed by various companies challenging the validity of show cause notices and orders issued by revenue authorities relying on Rule 96(10) and Rule 89(4B) of the Central Goods and Services Tax Rules, 2017 (“CGST Rules”).

Rule 96(10) restricted exporters from claiming refunds of Integrated Goods and Services Tax (IGST) paid on exports if they had availed duty-free imports under schemes such as Advance Authorization or Export Promotion Capital Goods (EPCG). Rule 89(4A)/(4B) prescribed a formula for refund of unutilized input tax credit that created significant compliance difficulties for exporters. Recognizing these hardships, the GST Council recommended the omission of these rules in September 2024, and the Central Government implemented this through Notification No. 20/2024-Central Tax dated October 8, 2024. However, revenue authorities continued to issue notices under the omitted provisions, prompting legal challenges.

The petitioners argued that in the absence of a savings clause, all proceedings pending or initiated under the omitted rules were liable to abate, and that Section 6 of the General Clauses Act, 1897 does not apply to repeal by delegated legislation. The Hon’ble Bombay High Court accepted these arguments and quashed all show cause notices and adjudication orders issued under the omitted rules. The Court clarified that the effect of the judgment is retroactive, abating all such proceedings, except those already past and closed. Similar views have also been taken by the Gujarat, Calcutta, and Uttarakhand High Courts.

The batch of writ petitions was led by Mr. V. Sridharan (Senior Advocate), assisted by attorneys from Lakshmikumaran & Sridharan Attorneys — Mr. Sahil Parghi, Mr. Dhananjay Sethuraj, and Ms. Vidhi Jain.

Click to know more about Lakshmikumaran & Sridharan

If you have a news or deal publication or would like to collaborate on content, columns, or article publications, connect with the Legal Era News Network Team and email us at info@legalera.in or call us on +91 8879634922.