When Rules Vanish, So Do Proceedings
Hikal Limited & Others v. Union of India
High Court of Judicature at Bombay | WP No. 78 of 2025
Background & Parties
A batch of petitions was filed by manufacturers and exporters — led by Hikal Limited (pharmaceutical intermediates), along with Yasho Industries, Prashi Pharma, Vidhi Specialty Food Ingredients, and others — challenging Rule 89(4B) and Rule 96(10) of the CGST Rules, 2017.
Rule 96(10) applied to exporters who availed exemption/concessional rate on imports. Rule 89(4B) placed parallel restrictions on importers using Advance Authorisation licences — both imposing strict conditions on IGST refunds.
The Turning Point
Central GST (Second Amendment) Rules, 2024 — both Rules 89(4B) and 96(10) deleted entirely.
No Savings Clause.
Nothing to protect pending show-cause notices or adjudication orders passed under the omitted Rules.
No “Savings Clause” was included.
The absence was later found by the Court to be “conspicuous and deliberate” — out of ~64 such notifications, many contained express savings clauses.
Eight Issues Framed by the Court
Core Legal Question
“Does Section 6 of the General Clauses Act save pending proceedings when a Rule is omitted without a savings clause?”
Section 6 GCA applies because the Rules were made under a Central Act (Section 164, CGST Act).
NO.
Section 6 applies only to “Central Acts” or “Regulations” — not to subordinate “Rules.” Two Constitution Bench decisions make this clear.
Key Precedents Relied Upon
Rayala Corporation (P) Ltd. v. Director of Enforcement
Section 6 GCA does not apply to repeal of a Rule; only to Central Acts or Regulations.
Kolhapur Cane Sugar Works Ltd. v. Union of India
Affirmed Rayala; absent a savings provision, pending proceedings lapse upon rule omission.
Keshvan Menon v. State of Bombay
Defines limits of “transactions past and closed” — requires finality of the order/proceedings.
M/s Sance Laboratories v. Union of India
Rule 96(10) declared ultra vires and unconstitutional; revenue directed not to initiate recovery.
M/s Add Wrap Packaging Pvt. Ltd.
Omission of same Rules vide Oct 2024 notification lapsed all pending proceedings.
Pasupuleti Venkateshwarlu v. Motor & General Traders
Courts must take note of subsequent events (rule omission) during pendency of proceedings.