CONTINUATION AND VALIDATION OF RECOVERY PROCEEDINGS IN GST

[Dr. Sanjiv Agarwal]

Continuation and validation of certain recovery proceedings (Section 84)

Section 84 of CGST Act, 2017, contains the provisions in relation to continuation and validation of certain recovery proceedings by virtue of any appeal or revision initiated in respect of any Government dues. It deals with two types of situations viz,

1. Where Government dues are enhanced in any appeal or revision or any other proceeding, and
2. Where Government dues are reduced in any appeal or revision or any other proceedings

What are Government dues ?

Section 84 of CGST Act, 2017 provides for validation and continuation of recovery proceedings of ‘Government dues’.

According to the provision, though Government dues has not been defined in the Act, Government dues shall comprise of the following :

• Any tax
• Any penalty
• Any interest
• Any other amount payable under the Act.

This implies that any amount payable under the GST law, recovery of which is under any proceedings will be covered.

As per provisions of section 84(a) of the CGST Act, 2017, in case the Government dues payable by any taxable person are subject matter of an appeal, revision or any other proceedings and the amount of such dues is enhanced by such Court or Authority, in such case, the Commissioner shall serve on the taxable person another notice of demand only in respect of enhanced amount and the recovery proceedings be continued from the stage at which it stood immediately before such disposal of matter.

As per provisions of section 84(b) of the CGST Act, 2017, where the Government dues are reduced in any order of appeal, revision or any other proceedings:

(a)   There is no need for Commissioner to issue a fresh order.

(b)   Commissioner will intimate of such reduction to the taxable person and to the authorities with whom recovery proceedings are pending.

(c)   Recovery proceeding already initiated will continue but for the reduced amount now.

Order under section 84

The Commissioner of tax shall issue an order of enhancement of demand or reduction of demand as prescribed in rule 161 of the CGST Rule, 2017. However, he is expected to serve the notice and provide an opportunity of being heard before issuing such order in the following manner:

1. If notice has already been issued before any appeal, revision and proceedings, there is no need to issue a fresh notice of demand of amount already covered in the earlier notice.
2. If it is proposed to enhance the demand, Commissioner will have to issue a fresh (another) notice on the taxable person to cover the enhanced amount.
3. If the Government dues are reduced in any appeal, revision or proceedings, no notice is required to be served upon the taxable person. However, Commissioner shall intimate the reduction in demand to taxable person as well as appropriate tax authority.

Order for enhancement of demand

The Commissioner shall issue order for enhancement of any demand in Form GST DRC-25. In so far as the amount already confirmed prior to disposal of appeal/revision, the recovery proceedings may be continued from the stage at which such proceedings stood immediately before such disposal.

Order for reduction of demand

The Commissioner shall issue order for reduction of any demand in Form GST DRC-25 to the taxable person and the appropriate authority with whom the recovery proceeding is pending. The recovery proceedings already initiated prior to the disposal of such appeal/revision may be continued in relation to the amount so reduced from the stage at which such proceedings stood immediately before such disposal.

Continuity of proceedings

If notice of demand is already served on taxable person or any other person before such appeal, revision or any other proceedings, then recovery of enhanced amount would be continued from the stage at which the initial proceedings stood.

Any recovery proceedings initiated prior to the disposal of such appeal, revision application or other proceeding may be continued in relation to the amount so reduced from the stage at which such proceedings stood immediately before such disposal.