228.            ABC Ltd failed to discharge its GST on due date but paid both tax and interest for delayed payment before issue of show cause notice. Subsequently, department initiated penal proceedings against ABC Ltd for recovery of penalty under GST.

Discuss whether a penal proceeding initiated by the department is justified.

No, proceedings initiated by department are not justified.

Where any tax has not been paid the person chargeable with tax may pay the amount of tax and the applicable interest thereon on the basis of his own ascertainment thereof, before service of notice on him in respect of such tax and inform the proper office of such payment in writing. The office on receipt of such information shall not serve any notice in respect of the amount so paid. Further section 73 of the Act states that no penalty under any of the provisions of such Act and rules made there-under will be imposed in respect of payment of tax and interest thereon.