Section 16(5) Non-Obstante Clause Overrides Section 16(4) Deadlines, Validating Delayed Input Tax Credit Claims
Issue
Whether the subsequently introduced non-obstante provision under Section 16(5) overrides the standard statutory time limits of Section 16(4), thereby validating Input Tax Credit (ITC) claims for the financial year 2018-19 if the corresponding monthly returns were furnished on or before the relaxed cut-off date of November 30, 2021.
Facts
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The petitioner is a registered GST taxpayer who claimed Input Tax Credit (ITC) for the financial year 2018-19.
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The department’s Show Cause Notice (SCN) recorded that the petitioner’s monthly returns for April 2018 to March 2019 were furnished on November 27, 2019, and November 28, 2019.
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The Revenue passed an adjudication order declining the ITC on the grounds that these monthly returns were not submitted within the strict statutory time limits prescribed under Section 16(4).
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The petitioner filed a writ petition challenging the denial, asserting their right to the credit under a later-inserted provision containing a non-obstante clause.
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This newly inserted provision, Section 16(5), explicitly permitted ITC claims for such periods provided the returns were furnished on or before November 30, 2021.
Decision
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Held, yes: The subsequently introduced Section 16(5) explicitly allows ITC claims for past periods as long as the relevant returns were furnished on or before the cut-off date of November 30, 2021.
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Held, yes: The petitioner’s returns were filed on November 27 and 28, 2019, which sits comfortably before the statutory relaxed cut-off deadline.
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Held, yes: Because Section 16(5) contains a powerful non-obstante clause directed at Section 16(4), the restrictive timelines of the older section lose all significance once the conditions of Section 16(5) are satisfied.
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Held, yes: The petitioner is fully entitled to relief; the original claim rejection order is quashed, and the department is directed to reconsider and grant the benefit of Section 16(5) if the petitioner is otherwise eligible.
Key Takeaways
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Legislative Overrides Erase Past Defaults: A non-obstante clause in a newly enacted subsection (like Section 16(5)) completely strips older restrictive clauses (like Section 16(4)) of their power to block a tax benefit, effectively wiping out the “delayed filing” taint.
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Retrospective Relief Windows: Section 16(5) acts as a specialized amnesty window designed by the legislature to protect taxpayers who missed initial filing deadlines but managed to clear their compliance backlogs before November 30, 2021.
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Conditional Merits Re-evaluation: While a court will quash a flat denial based on limitation deadlines when Section 16(5) applies, the department retains the right to verify if the ITC claim satisfies all other standard, non-time-related statutory eligibility criteria.