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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 tax, interest and penalty is served on a registered person. He files an appeal, and the appellate order reduces the Government dues. Under the CGST Act provision on continuation of recovery proceedings, what is the position?

When appeal reduces the dues, no fresh demand notice is required. The Commissioner intimates the reduction to the taxpayer and the recovery authority, and recovery continues for the reduced amount from the stage it had reached, because section 84 expressly dispenses with a fresh notice.

  1. AThe Commissioner must serve a fresh notice of demand for the reduced amount before any recovery continues
  2. BAll recovery proceedings lapse and must be restarted after the appeal is disposed of
  3. CThe Commissioner need not serve a fresh notice, but must intimate the reduction to the person and to the authority where recovery is pendingCorrect
  4. DRecovery can continue only after the person pays the reduced amount in full

Explanation

Section 84(b) says that where dues are reduced in appeal, no fresh notice of demand is needed. The Commissioner gives intimation of the reduction to the person and to the appropriate authority with whom recovery is pending. Recovery then continues for the reduced amount from the stage it had reached. A fresh notice is required only when dues are enhanced.

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