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CA Final · Indirect Tax Laws · Demands and Recovery

Meridian Pvt Ltd received an order under section 73(9) for a demand pertaining to FY 2018-19, with no appellate order yet passed. The company has a separate writ petition pending before the High Court on the same demand, and it did not withdraw it by the notified date. It offers to pay the full tax in the order by the notified date seeking waiver of interest and penalty under section 128A. Which is correct?

Waiver under section 128A is not available, because a writ petition filed by the person is pending before a court and was not withdrawn by the notified date. Eligible period alone does not secure the waiver when sub-section (3) bars it.

  1. AWaiver is available because the order covers a period between 1 July 2017 and 31 March 2020
  2. BWaiver is available only for penalty, not interest
  3. CWaiver is available if tax is paid within three months of the order
  4. DWaiver is not available because a writ petition on the matter is pending and was not withdrawn by the notified dateCorrect

Explanation

Section 128A(3) states that sub-section (1) does not apply where an appeal or writ petition filed by the person is pending before an Appellate Authority, Tribunal or court and has not been withdrawn on or before the notified date. The period being within 1 July 2017 to 31 March 2020 is necessary but not sufficient. So the waiver is unavailable.

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