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CA Final · Indirect Tax Laws · Demands and Recovery

Rohan Enterprises' demand of Rs 6,00,000 was reduced to Rs 4,00,000 by the Appellate Authority. Recovery proceedings were pending before a recovery authority on the original demand. As per section 84 of the CGST Act, which statement is correct?

No fresh notice is needed. The Commissioner intimates the reduction to the taxable person and to the authority where recovery is pending, and recovery continues for the reduced Rs 4,00,000 from the stage it had reached, as section 84(b) provides.

  1. AA fresh notice of demand for Rs 4,00,000 must be served before recovery can continue
  2. BRecovery proceedings lapse entirely and must be restarted by new order
  3. CThe Commissioner need not serve a fresh notice but must intimate the reduction to the taxable person and to the authority with whom recovery is pending; recovery continues for the reduced amount from the stage reachedCorrect
  4. DRecovery continues for the full Rs 6,00,000 until the assessee claims a refund of the excess

Explanation

Section 84(b) says no fresh notice of demand is needed on reduction. The Commissioner gives intimation of the reduction to the person and to the appropriate authority where recovery is pending, and recovery continues for the reduced amount from the stage it had reached. A fresh notice is therefore not required.

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