CA Final · Indirect Tax Laws · Demands and Recovery
Mehta Components Pvt. Ltd. was served a notice of demand for Rs 10,00,000 of Government dues, and recovery proceedings were started on it. Mehta filed an appeal, and the appellate order reduced the dues to Rs 6,00,000. Which statement correctly reflects the position under section 84 of the CGST Act?
Recovery continues for the reduced Rs 6,00,000 from the stage it had reached, without a fresh notice of demand. The Commissioner must intimate the reduction to the taxpayer and to the authority handling recovery. A fresh notice is required only when dues are enhanced.
- AThe Commissioner must serve a fresh notice of demand for Rs 6,00,000 before recovery can continue
- BAll recovery proceedings lapse and must be started afresh on the reduced amount
- CRecovery may continue for the reduced amount from the stage reached earlier, with no fresh notice, and the Commissioner must intimate the reduction to the taxpayer and the recovery authorityCorrect
- DRecovery may continue for the original Rs 10,00,000 until the appellate order is separately recovered
Explanation
Under section 84(b), where dues are reduced in appeal, no fresh notice of demand is needed. The Commissioner gives intimation of the reduction to the taxpayer and the authority with whom recovery is pending. Recovery continues for the reduced amount from the stage at which it stood. A fresh notice is needed only when dues are enhanced, and then only for the enhanced portion.
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