- 1 - HC-KAR CNR: KAHC010301202026 NC: 2026:KHC:52863-DB WA No. 1261 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF SEPTEMBER, 2026 PRESENT THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE AND THE HON'BLE MRS. JUSTICE K.S. HEMALEKHA WRIT APPEAL NO. 1261 OF 2026 (T-RES) BETWEEN: 1. UNION OF INDIA THROUGH THE SECRETARY MINISTRY OF FINANCE DEPARTMENT OF REVENUE NO. 137, NORTH BLOCK NEW DELHI - 110 001 2. STATE OF KARNATAKA THROUGH THE PRINCIPAL SECRETARY FINANCE DEPARTMENT VIDHANA SOUDHA BENGALURU - 560 001 3. THE CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL REVENUE BUILDINGS LP. ESTATE, ITO NEW DELH - 110 001 4. DEPUTY COMMISSIONER OF CENTRAL TAX BENGALURU EAST DIVISION - 9 GST COMMISSIONERATE 3RD FLOOR, BMTC BUS STAND OLD AIRPORT ROAD, DOMMALURU BENGALURU …APPELLANTS (BY SMT. TEJASHWINI B.M., ADVOCATE AND SRI UNNIKRISHNAN M., ADVOCATE) Digitally signed by SRIDEVI S Location: High Court of Karnataka - 2 - HC-KAR CNR: KAHC010301202026 NC: 2026:KHC:52863-DB WA No. 1261 of 2026 AND: 1. M/S. EFD INDUCTION PVT LTD HAVING OFFICE AT PLOT NO.43 & 44, KIADB BENGALURU AEROSPACE PARK BENGALURU NORTH TALUK - 562 129 REPRESENTED BY ITS AUTHORISED SIGNATORY MR. VISHAL LODHA AGED 33 YEARS RESIDING AT GLAT G7 NANDA COMFORTS NO.14, 18TH CROSS 15TH MAIN PADMANABHANAGAR BANGALORE - 560 061 …RESPONDENT THIS WRIT APPEAL FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING THAT THE ORDER DATED 09/12/2025 PASSED BY THE LEARNED SINGLE JUDGE IN THE CASE OF W.P. NO.10540/2023 MAY BE SET ASIDE AND ETC. THIS APPEAL, COMING ON FOR PRELIMINARY HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE and HON'BLE MRS. JUSTICE K.S. HEMALEKHA - 3 - HC-KAR CNR: KAHC010301202026 NC: 2026:KHC:52863-DB WA No. 1261 of 2026 ORAL JUDGMENT (PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE) 1. For the reasons stated in the application, I.A.2/2026, the same is allowed. The delay of 105 days in filing the appeal is condoned. 2. The Revenue has filed the present appeal impugning the order dated 09.12.2025 passed by the learned Single Judge in WP.No.10540/2023 (T-RES). The respondent had filed the said petition, inter alia, impugning Rule 96(10) of the Central Goods and Services Tax Rules, 2017 [CGST Rules]. 3. The respondent is a company engaged in the business of manufacturing hardening machines and related job works, which are used in automobiles and wind power generation machines. The respondent is also registered under the Central Goods and Service Tax Act, 2017 [CGST Act]. The respondent had secured advance authorization licences under a Foreign Trade Policy 2015-2020, whereby it was allowed to import raw materials used in manufacture of the products for exports on claiming exemption from payment of duty. - 4 - HC-KAR CNR: KAHC010301202026 NC: 2026:KHC:52863-DB WA No. 1261 of 2026 4. The respondent had applied for refund of tax for the period January 2020 to December 2021 amounting to `57,39,201/- under Section 54(3)(1) of the CGST Act, read with Rule 89 of the CGST Rules. The concerned authority found that the respondent had availed an input tax benefits and had also claimed refund of the IGST on exports. According to the concerned authority, this was contrary to the restrictions imposed under Rule 96(10) of the CGST Rules. However, Rule 96(10) of the CGST Rules was deleted by a notification dated 08.10.2024. It is the Revenue's case that the same is prospective and does not entitle the respondent to claim the benefit of the notification. 5. The learned Single Judge, following an earlier decision of this Court in M/s Hikal Limited vs. Union of India and others1 allowed the petition. 6. The learned counsel appearing for the Revenue handed over a recent decision of the Supreme Court in Goodluck India Limited and Another vs. Union of India and others2, whereby the said 1 Writ Petition 15251/2020 dated 09.12.2025 2 2026 SCC OnLine SC 1523 - 5 - HC-KAR CNR: KAHC010301202026 NC: 2026:KHC:52863-DB WA No. 1261 of 2026 issue stands authoritatively settled. The Supreme Court following the Constitution Bench decision in Kolhapur Canesugar Works Ltd. v. Union of India3 held that the proceedings under an omitted rule could not be continued. The Supreme Court found that since there was no savings clause or a sunset clause in respect of Rule 96 (10) of the CGST Rules proceedings, the said rule could not be kept alive. Paragraph 7 of the said decision is set out below: “7. The Constitution Bench decision applies squarely in the above case. We may also observe that even going by the recommendations as extracted hereinabove, sub-rule (10) of Rule 96 was omitted because it was ‘leading to unnecessary complications without any intended benefit being served’ (sic). As fairly submitted by the learned ASG the legislature has not brought in any saving clause or a sunset clause, when sub-rule (10) of Rule 96 was omitted. The recommendation that the omission should be prospective is also advisory in nature and does not bind the rule making authority. The intention to omit the rule without any saving clause was to bring to an end, the unnecessary complications once and for all and the intention cannot be to keep alive the unnecessary complications insofar as the pending proceedings are concerned.” 7. In view of the above, we find no ground to interfere with the impugned order. The appeal is, accordingly, dismissed. 3 (2000) 2 SCC 536 - 6 - HC-KAR CNR: KAHC010301202026 NC: 2026:KHC:52863-DB WA No. 1261 of 2026 8. The pending interlocutory application also stands disposed of. Sd/- (VIBHU BAKHRU) CHIEF JUSTICE Sd/- (K.S. HEMALEKHA) JUDGE SD List No.: 1 Sl No.: 2