Judicial Corner: ITC denied for FY 2019–20 on limitation under Section 16(4) becomes admissible upon notification of the overriding provision under Section 16(5) (06.02.2026)

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ITC denied for FY 2019–20 on limitation under Section 16(4) becomes admissible upon notification of the overriding provision under Section 16(5) { Sesame Technologies (P.) Ltd. vs. Deputy State Tax Officer [2026] 182 taxmann.com 768 (Kerala)}

Facts

  • The assessee claimed Input Tax Credit (ITC) for FY 2019-20.
  • The department denied the ITC only on the ground that the claim was time-barred under Section 16(4) of the CGST/SGST Act.
  • Later, Section 16(5) was notified, which overrides Section 16(4) and grants a special/extended time window to avail ITC for earlier financial years subject to prescribed conditions.

Issue

  • Whether ITC denied earlier solely due to limitation under Section 16(4) can be allowed in view of the newly inserted Section 16(5).

Held

  • Section 16(5) has an overriding effect over Section 16(4).
  • Assessees get a fresh opportunity/right to claim ITC for the specified period.
  • Therefore, denial based only on limitation is not sustainable.
  • The assessment order was set aside, and the matter was remanded for reconsideration in light of Section 16(5).