Retrospective Relief under Section 16(5) of the CGST Act

The Kerala High Court in O. Ibrahim Kutty v. State Tax Officer delivered an important ruling clarifying the beneficial and retrospective operation of Section 16(5) of the CGST Act introduced through the Finance (No. 2) Act, 2024. 

The Court held that where a taxpayer had furnished returns before the statutory cut-off date prescribed under Section 16(5), denial of Input Tax Credit solely on limitation grounds under Section 16(4) was unsustainable.

The judgment reinforces the legislative intent behind insertion of Section 16(5), namely to provide a one-time curative relaxation to taxpayers who had belatedly furnished returns for specified tax periods during the GST transition and disruption years.