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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Assessment, Audit, Scrutiny, Demand and Recovery, Advance Ruling, Appeals and Revision

A notice of demand for Government dues of ₹10 lakh is served on Sharma Traders Ltd. and recovery begins. In appeal, the dues are reduced to ₹6 lakh. Under section 84 of the CGST Act, what follows?

No fresh notice of demand is needed when dues are reduced in appeal. The Commissioner intimates the reduction to the person and the recovery authority, and recovery continues for the reduced amount from the stage it had reached. A fresh notice is needed only on enhancement.

  1. ANo fresh notice of demand is needed; the Commissioner intimates the reduction and recovery continues for the reduced amount from the stage reachedCorrect
  2. BThe earlier recovery proceedings lapse and recovery restarts from scratch
  3. CA fresh notice of demand must be served for ₹6 lakh
  4. DRecovery stops until the Commissioner serves a notice for the enhanced amount

Explanation

Under section 84(b), where dues are reduced in appeal, no fresh notice is needed. The Commissioner intimates the reduction to the person and the authority handling recovery, and recovery continues for the reduced amount from the stage reached. A fresh notice is required only where dues are enhanced, and then only for the enhanced amount.

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