Section 16(5) Overrides Section 16(4) to Grant Input Tax Credit for Returns Filed Before November 30, 2021

By | October 28, 2026
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Section 16(5) Overrides Section 16(4) to Grant Input Tax Credit for Returns Filed Before November 30, 2021

Issue

  • Whether the statutory time limit for claiming Input Tax Credit (ITC) under Section 16(4) of the CGST/KGST Act, 2017 is overridden by the non-obstante clause of Section 16(5) for returns filed on or before November 30, 2021.
  • Whether an order disallowing ITC under Section 73 based on Section 16(4) limitation is sustainable when the return was submitted prior to the November 30, 2021 deadline specified in Section 16(5).

Facts

  • Period of Claim: The petitioner claimed Input Tax Credit (ITC) for the period from January 2019 to March 2019 (relevant to FY 2018–19 / FY 2019–20).
  • Filing Date: The GST returns for the period January–March 2019 were furnished by the petitioner on September 30, 2020.
  • Disallowance Order: The proper officer applied the limitation period under Section 16(4) and issued an order under Section 73 disallowing the claimed ITC on account of delayed return filing.
  • Statutory Invocation: The petitioner challenged the disallowance by invoking Section 16(5) of the CGST/KGST Act, which prescribed a relaxed cut-off date of November 30, 2021 for claiming ITC.

Decision

  • Non-Obstante Effect of Section 16(5): Section 16(5) opens with a non-obstante clause that explicitly overrides the time restrictions contained in Section 16(4).
  • Insignificance of Section 16(4) Timeline: Once the condition of filing GST returns on or before November 30, 2021 is satisfied, the original timelines under Section 16(4) lose significance for determining ITC eligibility.
  • Quashing of Disallowance Order: The impugned disallowance order (Ext. P2) was quashed, and the matter was remanded to the authority to reconsider and grant ITC benefits to the petitioner, provided all other eligibility conditions were met.

Key Takeaways

  • Overriding Scope of Section 16(5): The insertion of Section 16(5) operates with an overriding effect over Section 16(4), protecting ITC claims where returns for the relevant financial years were filed on or before November 30, 2021.
  • Relief for Delayed Returns: Tax authorities cannot sustain Section 16(4) disallowances under Section 73 or Section 74 without evaluating the relief granted under Section 16(5).
  • Conditional Grant of Benefits: While Section 16(5) removes the time-bar constraint under Section 16(4), the taxpayer must still satisfy all other underlying statutory requirements to claim Input Tax Credit.
HIGH COURT OF KERALA
Jaykay Trade Links
v.
Assistant Commissioner
ZIYAD RAHMAN A.A., J.
WP(C) NO. 35010 OF 2026
OCTOBER  12, 2026
Aji V. Dev, Alan Priyadarshi Dev, Smt.Vandana Bhat T.V., S. Sajeevan and Jash C James, Advs. for the Petitioner. Smt. Sindhu Santhalingam, Sr. GP for the Respondent.
JUDGMENT
1. The petitioner is an assessee under the provisions of CGST/SGST Act 2017. The grievance highlighted by the petitioner is against the denial of input tax credit claimed by the petitioner pertaining to the year 2019-2020 on the reason that, the petitioner failed to submit the return for the month of January to March, 2019 within in the period stipulated under Sec.16(4) of the CGST Act. Ext.P2 is the order passed under Sec.73 of the CGST Act. The challenge is raised against Ext.P2 order mainly on the ground that, by virtue of Sec.16(5) of the CGST Act, which is newly introduced, the petitioner is entitled to claim the input tax credit, in view of the fact that the petitioner submitted the return for the month of January to March 2019 on 30.09.2020, which is within the cutoff date contemplated under Sec.16(5) of the Act, i.e, 30.11.2021.
2. After hearing the learned counsel for the petitioner and the learned Government Pleader, I find merits in the said submission. In Ext.P2 order itself, it is specifically recorded that the petitioner submitted the returns for the month of January to March 2019 on 30.09.2020. As per Sec.16(5), a tax payer who submits return on or before 30.11.2021 shall be entitled to avail input tax credit covered by the same. Moreover, Sec.16(5) starts with the wordings “Notwithstanding anything contained in Sub Sec.4” and this would mean that, once the returns are filed within the statutory period contemplated under Sec.16(5), the timeline contemplated under Sec.16(4) losses its significance. Therefore, an interference is required as the petitioner is entitled to get input tax credit in the Sec.16(5).
Accordingly, this writ petition is disposed of, quashing Ext.P2, with a direction to the 1st respondent to reconsider the matter and grant the benefits under Sec.16(5) of the CGST Act, if the petitioner is otherwise entitled to the same. Necessary orders in this regard shall be passed within a period of three months from the date of receipt of copy of this judgment, after affording an opportunity of hearing to the petitioner.