Liability Paid Yet Recovery Being Initiated - Goods and Services Tax - GST

An order u/s 74 was passed against one of my clients by the CGST Department, imposing a 100% penalty. This was because, at the time of passing the order, the officer couldn t confirm if the client would avail the relief under Section 74(11) , which allows a 50% penalty reduction if payment is made within 30 days. The client has since made the payment within the stipulated time and adjusted all liabilities using the DRC-03A functionality. However, the SGST Department, which handles recovery, is still demanding the remaining 50% penalty. They argue it s recoverable solely because it appears in the E-Liability Ledger, which they claim they cannot update. Despite discharging all liabilities as per law, the SGST officer is threatening bank attachment for the so-called outstanding penalty. The Central GST Officer is reluctant in rectifying order to 50% penalty as it does not fall within Section 161 . What could be a possible solution to resolve this situation?