M/s Deepam Palm Dish v. State Tax Officer & Others

Introduction

This judgment is a significant ruling on the retrospective relief granted under Section 16(5) of the CGST Act, introduced through the Finance Act, 2023. The Kerala High Court held that where a registered person has furnished the returns before the statutory cut-off date prescribed under Section 16(5), the restriction contained in Section 16(4) ceases to apply due to the non-obstante clause contained in Section 16(5).

The Court clarified that Section 16(5) is a beneficial provision enacted to revive Input Tax Credit (ITC) that had lapsed only because of delay in filing returns. Consequently, the denial of ITC merely on the ground of Section 16(4), without examining the applicability of Section 16(5), is unsustainable in law.