Most sources I read say Mustard Gas was first used by the Germans on July 12 near Ypres against British and Canadian troops. Hence it even got the name Yperite apparently.
According to a reference on Wikipedia, J.E. Edmonds says in "Military Operations France and Belgium 1917: 7 June – 10 November. Messines and Third Ypres (Passchendaele). History of the Great War Based on Official Documents by Direction of the Historical Section of the Committee of Imperial Defence. II (Imperial War Museum & Battery Press ed.)" it was used on July 10 near Nieuwpoort during Unternehmen Strandfest (in combination with blue cross gas shells).
Do we know who is right here?
Unternehmen Strandfest was a smaller operation and the gas seemed to be used for counter artillery fire. It was also "near Ypres", so there is room for error in both versions.
As far as I'm aware the Edmonds version is not correct. The Germans did not use mustard gas at Nieuwpoort.
Simon Jones, who wrote several books and articles on gas warfare, specifically mentions that Edmonds is wrong on his site The British Official History, J. E. Edmonds, Military Operations France and Belgium 1917 Vol. II, (HMSO. London, 1948), p. 119, mistakenly states that the Germans used mustard gas in the bombardment prior to this assault..
All the books and articles I have give July 12 as the first Mustard gas attack