The Central Board of Indirect Taxes and Customs (CBIC), Ministry of Finance, has accepted the judgment of the Hon’ble Supreme Court dated August 6, 2026, holding that the omission of Rule 96(10) of the Central Goods and Services Tax Rules, 2017 applies to all proceedings that were pending as on the date of its omission.
The position has been communicated by the GST Policy Wing, CBIC, through Office Memorandum F. No. CBIC-20010/21/2026-GST dated August 24, 2026, issued with the approval of Member (GST), CBIC.
Supreme Court ruling in Goodluck India case
The matter arose from the judgment dated August 6, 2026 passed by the Hon’ble Supreme Court in Special Leave Petition (Civil) No. 24550 of 2025, M/s Goodluck India Limited & Anr. v. Union of India & Ors., along with other connected matters.
CBIC examined the judgment following a reference received from its Legal Cell dated August 19, 2026.
The Hon’ble Supreme Court held that since no saving clause accompanied the omission of Rule 96(10) of the CGST Rules, 2017, such omission would apply to all proceedings pending as on the date on which the Rule was omitted.
Restrictions under Rule 96(10) cannot survive for pending proceedings
The Supreme Court further observed that Rule 96(10) had been omitted because it was leading to unnecessary complications without serving the intended benefit.
The Court also held that the recommendation that the omission should operate prospectively was merely advisory in nature and could not bind the rule-making authority.
Consequently, the restrictions contained in the erstwhile Rule 96(10) cannot be applied to proceedings that remained pending when the Rule was omitted.
Supreme Court relies on Constitution Bench ruling in Kolhapur Canesugar Works
While arriving at its decision, the Hon’ble Supreme Court relied upon the Constitution Bench judgment in Kolhapur Canesugar Works Ltd. v. Union of India [(2000) 2 SCC 536].
In that case, the Constitution Bench had held that Section 6 of the General Clauses Act, 1897 does not apply to the omission of a rule.
The principle reiterated by the Supreme Court is that where a statutory rule is omitted, pending proceedings can continue only when there is an express saving provision permitting their continuation, or where an appropriate legal mechanism has specifically been incorporated in the statute or rules for preserving such proceedings.
CBIC has also noted that a similar legal view had earlier been expressed by the Additional Solicitor General.
No corresponding saving provision presently exists under GST law
CBIC has further highlighted that following the Supreme Court’s earlier ruling in Kolhapur Canesugar Works, specific saving provisions were incorporated in the Central Excise Act, 1944 and the Customs Act, 1962 through the Finance Act, 2001.
Accordingly, Section 38A of the Central Excise Act, 1944 was inserted with retrospective effect from February 28, 1944, while Section 159A of the Customs Act, 1962 was inserted with retrospective effect from February 1, 1963.
These provisions were introduced to ensure that amendments or omissions of rules and regulations did not extinguish existing rights, liabilities or ongoing legal proceedings.
CBIC has observed that no comparable saving provision exists under the GST law. In the absence of such a provision, the omission of a rule, in effect, applies even to pending proceedings.
CBIC accepts Supreme Court judgment
After examining the judgment and the applicable legal position, the GST Policy Wing has concluded that the judgment of the Hon’ble Supreme Court dated August 6, 2026 in M/s Goodluck India Limited & Anr. v. Union of India & Ors. may be accepted.
The Office Memorandum has been issued with the approval of Member (GST), CBIC.
Key Takeaway
The CBIC’s acceptance of the Supreme Court ruling has significant implications for disputes arising under the erstwhile Rule 96(10) of the CGST Rules. Where proceedings relating to the restrictions imposed under Rule 96(10) were pending on the date of its omission, those restrictions cannot continue to be enforced merely on the ground that the underlying transactions pertained to the period when the Rule was in force.
The Office Memorandum can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/09/CBIC-OFFICE-MEMORANDUM-24.08.2026.pdf
