Facts of the Case

The petitioner, M/s WINTAC Limited, an exporter that had availed benefits under an Advance Authorisation, challenged the Central Goods and Services Tax (Twelfth Amendment) Rules, 2018 (Notification No. 54/2018-Central Tax dated 9th October 2018), insofar as it substituted Rule 96(10) of the CGST Rules, 2017. That amended rule restricted the refund of IGST paid on exported goods where the exporter had availed Advance Authorisation benefits on inputs. The petitioner sought quashing of the amendment, a direction restraining coercive recovery of IGST refunds already sanctioned, waiver and refund of interest paid on IGST relatable to imports from an SEZ treated as deemed imports, and refund of Input Tax Credit of Rs. 2,35,26,936/-, in the backdrop of a Show Cause Notice dated 07.10.2020 (Annexure-R) issued by the Directorate General of GST Intelligence.

Issues Involved

  1. Whether the restriction imposed by amended Rule 96(10) of the CGST Rules on IGST refund for exporters availing Advance Authorisation benefits, and the consequential Show Cause Notice, could be sustained.

Petitioner's Arguments

  • The issue was squarely covered by the Court's own decision in M/s Hikal Limited v. Union of India (W.P. No. 15251/2020, decided 09.12.2025), where Rule 96(10) had been held unsustainable.
  • Several High Courts, including the Kerala and Bombay High Courts, had already struck down Rule 96(10), and the rule itself now stood omitted by the Government's own Notification dated 08.10.2024.

Respondent's Arguments

  • The respondents contended that there was no merit in the petition and that it was liable to be dismissed.

Court Order / Findings

  • The Court held the petition to be squarely covered by its coordinate-bench decision in Hikal Limited, which, noting the striking down of Rule 96(10) by other High Courts and its own omission by the Government via Notification dated 08.10.2024, had quashed the impugned Show Cause Notice and all further proceedings.
  • Applying the same reasoning, the Court allowed the petition and disposed of it in terms of the Hikal Limited decision.
  • The respondent authorities were directed to refund the amount payable to the petitioner along with applicable interest, as expeditiously as possible and at any rate within three months from receipt of a copy of the order.

Important Clarification

  • Rule 96(10) of the CGST Rules, which restricted IGST refund on exports where Advance Authorisation benefits were availed, stands effectively nullified in view of its invalidation by multiple High Courts and its own omission by the Government by Notification dated 08.10.2024; Show Cause Notices and proceedings premised on that rule are liable to be quashed, with consequential refund of IGST along with interest.

Sections Involved

  • Rule 96(10) of the CGST Rules, 2017 (as amended by the Twelfth Amendment Rules, 2018) — restriction on IGST refund on exports where Advance Authorisation was availed on inputs.
  • Section 16 of the IGST Act, 2017 — zero-rated supply and refund of IGST paid on exports.

Decision – In Favour of

Allowed, in favour of the Assessee — Show Cause Notice quashed and refund of IGST with applicable interest directed within three months.

Case Details

Court: High Court of Karnataka at Bengaluru
Case No.: WP No. 4998 of 2020 (T-RES)
Neutral Citation: NC: 2025:KHC:52372
Coram: Hon'ble Mr. Justice S.R. Krishna Kumar
Date of Order: 9th December, 2025

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