PAZHASSI MOTORS v. STATE OF KERALA & ORS.

Introduction

This judgment of the Kerala High Court is a significant ruling on the retrospective relief granted under Section 16(5) of the CGST Act. The Court held that the newly inserted Section 16(5), which begins with a non-obstante clause overriding Section 16(4), creates an independent statutory right to claim Input Tax Credit (ITC) where the relevant returns were furnished on or before the prescribed cut-off date of 30.11.2021.

The Court further clarified that the introduction of Section 16(5) constitutes a fresh cause of action. Therefore, even if a taxpayer had earlier unsuccessfully challenged the constitutional validity of Section 16(4), such earlier litigation does not bar a subsequent claim based on the newly enacted Section 16(5).