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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

Under section 84 of the CGST Act, Government dues of ₹10,00,000 were demanded and recovery had begun. In appeal the dues were enhanced to ₹14,00,000. Which statement is correct?

The Commissioner must serve another notice of demand only for the enhanced ₹4,00,000. Recovery on the original ₹10,00,000 notice continues from the stage it had reached, without any fresh notice, as section 84(a) of the CGST Act provides.

  1. AThe Commissioner serves another notice of demand for ₹4,00,000, and recovery on the original ₹10,00,000 may continue without a fresh notice from the stage reachedCorrect
  2. BA fresh notice of demand for the entire ₹14,00,000 is required and the earlier recovery stops
  3. CNo further notice is needed for the ₹4,00,000 enhancement
  4. DRecovery on the original demand must be stopped until the enhanced amount is separately adjudicated

Explanation

Section 84(a) requires another notice of demand only for the amount of enhancement, which is ₹14,00,000 minus ₹10,00,000 = ₹4,00,000. Recovery for the original notice continues without a fresh notice from its existing stage. Requiring a notice for the full ₹14,00,000 is wrong because the original demand already stands covered.

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