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CA Final · Indirect Tax Laws · Appeals and Revision (GST)

Sundaram Industries received a demand notice of Rs 10 lakh, and recovery proceedings began. Its appeal was later decided and the demand was reduced to Rs 6 lakh. Under section 84, what is the correct position?

No fresh demand notice is required. The Commissioner intimates the reduction to the taxpayer and to the authority handling recovery, and recovery continues for the reduced Rs 6 lakh from the stage it had reached. A fresh notice is needed only when dues are enhanced.

  1. AThe Commissioner must serve a fresh notice of demand for Rs 6 lakh and restart recovery
  2. BAll recovery proceedings stand dropped and must be initiated afresh
  3. CNo fresh notice is needed; the Commissioner intimates the reduction to the person and to the authority with whom recovery is pending, and recovery continues for the reduced amount from the stage reachedCorrect
  4. DRecovery continues for the full Rs 10 lakh until the person claims a refund of the excess

Explanation

Under section 84(b), when 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, and recovery may continue for the reduced amount from the stage at which it stood. A fresh notice is required only where dues are enhanced, and then only for the enhanced amount.

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