Later Introduced Non Obstante Provision Overrides Section 16(4) Deadlines Validating Delayed Input Tax Credit Claims
Issue
Whether the later-introduced non-obstante clause under Section 16 extends the limitation period for claiming Input Tax Credit (ITC) for March 2020, thereby overriding the regular statutory timelines under Section 16(4) for returns filed on or before November 30, 2021.
Facts
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The petitioner is a registered taxpayer under the CGST/KGST Acts who claimed Input Tax Credit (ITC) for the tax period of March 2020.
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The Proper Officer passed an assessment order denying the petitioner’s ITC claim, citing a delay in furnishing the monthly return under the standard provisions of Section 16(4).
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A Show Cause Notice (SCN) issued by the department recorded that the petitioner had successfully furnished the relevant monthly return on December 31, 2020.
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Aggrieved by the denial, the petitioner challenged the order by invoking a later-introduced non-obstante statutory provision.
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This new legislative provision permitted taxpayers to claim ITC provided their relevant returns were furnished on or before the relaxed cut-off date of November 30, 2021.
Decision
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Held, yes: The later-introduced non-obstante clause carries a overriding legal effect that completely supersedes the restrictive time limits previously established under Section 16(4).
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Held, yes: Because the department’s own SCN records that the petitioner filed the return on December 31, 2020, the filing sits safely before the statutory relaxed cut-off date of November 30, 2021.
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Held, yes: Since the condition of the new provision was met, the earlier standard timelines lose their legal significance, and the petitioner is fully entitled to the benefit of the amended law.
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Held, yes: The impugned assessment order declining the Input Tax Credit is legally unsustainable and is ordered to be quashed, ruling entirely in favor of the assessee.
Key Takeaways
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Non-Obstante Clauses Create Absolute Priority: A non-obstante clause (“notwithstanding anything contained…”) introduced into tax legislation completely neutralizes any conflicting restrictions or deadlines found in older parts of the same section.
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Retrospective Relief for Technical Defaults: Relaxed timelines introduced by the legislature to mitigate filing hardships provide retrospective protection to taxpayers who missed original deadlines but met the new, extended cut-off dates.
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Department Bound by its Own Records: The Revenue cannot sustain a demand based on a filing delay when its own primary evidence (such as dates captured in the SCN) demonstrates compliance with updated statutory relief timelines.