The palette information gives a hint:
The maximum number of colors on screen without timer interrupt tricks is: 256 palettes * 15 colors = 3840 (out of 2^16 = 65536).
So, yes, it seems possible thanks to the timer interrupt
The value of this counter is decremented by the pixel clock, which runs at 6MHz (166.7ns period).
With this resolution of 1 pixel, it looks like it's designed for raster/scanline effects.
Examples of usage mention sophisticated effects like sprite deformation. One famous example is Neo Turf Master, where timer interrupts were used to fake 3D effects