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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 the CGST Act, 2017, a notice of demand has been served and an appeal is then filed. In the appeal the Government dues are reduced. What is the position regarding the recovery proceedings already initiated?

Recovery continues for the reduced amount from the stage it had reached, and no fresh notice of demand is needed. The Commissioner only has to intimate the reduction to the taxable person and to the authority with whom recovery proceedings are pending, as section 84 of the CGST Act provides.

  1. AThe Commissioner must serve a fresh notice of demand for the reduced amount before any recovery can continue
  2. BAll recovery proceedings lapse and must be restarted after the appeal is disposed of
  3. CRecovery may continue for the reduced amount from the stage reached before disposal, with the Commissioner intimating the reduction to the taxable person and the authority holding the recovery proceedingsCorrect
  4. DRecovery continues for the original amount until the taxable person applies for a refund

Explanation

Section 84(b) provides that where dues are reduced in appeal, revision or other proceedings, no fresh notice of demand is needed. The Commissioner intimates the reduction to the taxable person and to the appropriate authority with whom recovery is pending. Recovery continues for the reduced amount from the stage it had reached. A fresh notice is required only when dues are enhanced, and then only for the enhanced amount.

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