Show Cause Notice Under Omitted Rule 89(4B) Is Non-Est: Himachal Pradesh High Court

The Himachal Pradesh High Court quashed a show cause notice of 2 Dec 2025 founded on Rule 89(4B) of the CGST Rules, which was omitted on 8 Oct 2024 without any saving clause.

The Himachal Pradesh High Court has held that a show cause notice issued under Rule 89(4B) of the Central Goods and Services Tax Rules, 2017, after that rule ceased to exist, is non-est because the issuing authority had no statutory backing. [Morepen Laboratories Limited v. Union of India & Ors., 2026-juristway.com-3134-HC(Himachal Pradesh)-GST]

A Division Bench of Justice Ajay Mohan Goel and Justice Romesh Verma allowed the writ petition and quashed the show cause notice (SCN) dated 2 Dec 2025. The petitioner had also sought a declaration that Rule 89(4B) is unconstitutional.

The petitioner argued that the rule had been omitted by a notification dated 8 Oct 2024 that contained no saving clause, so no notice could be founded on it in December 2025. It relied on the Supreme Court’s judgment in M/s Goodluck India Limited v. Union of India, which refers to the omission of the rule.

The Deputy Solicitor General submitted that the process leading to the SCN had been initiated and completed before the omission. The Bench recorded, however, that he could not show that Rule 89(4B) remained in the rule book on the date the SCN was issued.

The Bench relied on Goodluck India, where the Supreme Court applied the Constitution Bench decision in Kolhapur Canesugar Works Ltd v. Union of India (2000 (2) SCC, 536). Under that principle, proceedings under an omitted rule can continue only if a saving provision or a legal fiction keeps them alive.

The Supreme Court had also noted that the GST Council’s recommendation that the omission operate prospectively was advisory and did not bind the rule-making authority, and that no saving or sunset clause had been enacted.

Holding that the rule was indeed omitted without a saving clause, the Bench declared the SCN “non-est in the eyes of law as it was issued by the authority without any statutory backing to issue the same.” The petition was allowed with no order as to costs.

2026-juristway.com-3134-HC(Himachal Pradesh)-GST