Rule 89(4) Amendment Not Retrospective | Circular Legality to Be Reviewed – SC

Case Details: Union of India vs. Tata Steel Ltd. - [2025] 175 taxmann.com 756 (SC)

Judiciary and Counsel Details

• Abhay S. Oka & Ujjal Bhuyan, JJ.
• N. Venkataraman, A.S.G., Gurmeet Singh Makker, AOR, V.C. Bharathi, Sarthak Karol, Udai Khanna & Anuj Udupa, Advs. for the Petitioner.
• Tarun Gulati, Sr. Adv., Abhishek Anand, Darpan Bhuyan, Rahul Kumar, Salona Mittal, Advs. & M.P. Devanath, AOR for the Respondent.

Facts of the Case

The petitioner challenged Paragraph 47 of Circular No. 125/44/2019-GST, dated 18-11-2019, which mandated that, for processing export refund claims, the lower of the values indicated in the tax invoice or the shipping bill should be considered. The petitioner contended that this provision was ultra vires the CGST Act and the CGST Rules as well as arbitrary and violative of Articles 14 and 19(1)(g) of the Constitution of India. In addition, the petitioner contested the amendment to Rule 89(4) by Notification No. 14/2022, which introduced a similar stipulation for comparison between the invoice value and the shipping bill value. The petitioner argued that this amendment should not apply retrospectively. The High Court ruled that the amendment to Rule 89(4) was substantive, not clarificatory, and thus could not be applied retrospectively. The matter was placed before the Supreme Court for final determination.

Supreme Court Held

The Supreme Court upheld the High Court’s finding that the amendment to Rule 89(4) could not be applied retrospectively, as it was a substantive change in law. However, the Supreme Court remanded the matter to the High Court for a limited purpose: to review the legality of Circular No. 125/44/2019-GST, dated 18-11-2019. The Supreme Court did not interfere with the High Court’s conclusion regarding the retrospective operation of the amendment, but directed that the legality of the Circular be reconsidered.

List of Cases Reviewed

• Tata Steel Ltd. v. Union of India [2023] 154 taxmann.com 76/99 GST 855 /77 GSTL 350 (Jharkhand) (para 3) Partly affirmed