Retrospective extension of Input Tax Credit time limit under GST overrides the earlier restriction and invalidates denial for belated returns.

Section 16(5) of the CGST Act, introduced with a non-obstante clause, was treated as retrospectively extending the time limit for claiming Input Tax Credit for the covered periods, overriding the earlier restriction in Section 16(4). As the relevant return had been filed within the extended time, the adjudication denying credit could not be sustained. The High Court set aside the order denying Input Tax Credit and remitted the matter to the stage of reply to the show cause notice, granting relief to that extent.

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Issues: Whether disallowance of Input Tax Credit for belated filing of returns could survive after insertion of Section 16(5) of the CGST Act, and whether the adjudication order based on Section 16(4) of the CGST Act was liable to be set aside.

Analysis: Section 16(4) of the CGST Act restricts availment of Input Tax Credit beyond the prescribed time, but Section 16(5), introduced with a non-obstante clause, specifically permits credit in returns under Section 39 filed upto 30.11.2021 for the specified financial years. The provision was treated as having retrospective effect so that the time limit under Section 16(4) stood extended for the covered period. As the return for the relevant tax period had been filed within the extended time, the adjudication denying credit could not be sustained.

Conclusion: The adjudication order was set aside and the matter was remitted to the stage of reply to the show cause notice; the challenge to denial of Input Tax Credit succeeded to that extent.

Ratio Decidendi: A subsequent non-obstante amendment extending the statutory time limit for claiming Input Tax Credit applies retrospectively to the covered periods and overrides the earlier restriction under the original provision.

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