Relief in the recent finance budget from interest and penalty: A waiver of what?

The term ‘waiver’ is typically understood as a voluntary relinquishment or abandonment of a known existing legal right.

Section 128A introduced under the GST law entails non levy of interest and penalty in certain cases if tax demand is paid before a specified date. Is this a waiver of interest and penalty??

I don’t think, neither the revenue nor the taxpayer were barred from litigating the said tax assessment, hence, there is no relinquishment per se.

One crucial aspect of the new provision is the ‘deemed closure of proceedings.’ Once the tax is paid as required, both the revenue and the taxpayer cannot challenge the assessment further. This aspect can indeed be considered a form of waiver, as both parties surrender their legal right to challenge a notice or order they are aggrieved with.

So the endeavour of the legislature is to curtail litigation giving up interest and penalty and safeguarding tax, even in cases where the taxpayer had a fair chance to succeed before the courts.

Once it is so, the restriction under section 128A from refund of interest and penalty already paid seems unsustainable to my view.

Let’s see….