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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 of Rs 8,00,000 is pending recovery against Aarav Traders. An appeal results in the dues being enhanced by Rs 2,00,000. Recovery of Rs 3,00,000 out of the original Rs 8,00,000 has already been made. Which is correct under section 84 of the CGST Act?

Another demand notice is served only for the Rs 2,00,000 enhancement, while recovery on the original Rs 8,00,000 demand continues from the stage reached, without a fresh notice, as section 84(a) provides.

  1. AAnother notice is served for Rs 2,00,000, and recovery of the balance original demand continues without a fresh noticeCorrect
  2. BA fresh notice is served for Rs 10,00,000 and the Rs 3,00,000 recovered is ignored
  3. CA notice is served for Rs 7,00,000, being the enhanced dues less the amount recovered
  4. DNo notice is served and the recovery authority adds Rs 2,00,000 to the pending recovery

Explanation

Section 84(a) requires another notice only for the amount of enhancement, here Rs 2,00,000. Recovery under the original notice continues from the stage reached without a fresh notice. Serving a notice for Rs 7,00,000 wrongly nets the recovery against enhancement; the enhanced amount is the only new demand.

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