Section 84 – Continuation and Validation of Recovery Proceedings
Section 84 of CGST Act, 2017 – Continuation and Validation of Recovery Proceedings
Updated on: February 2026 (as applicable till date)
Prepared by: Yours Tax Consultant
1. Purpose of Section 84
Section 84 ensures that recovery proceedings already initiated do not automatically fail when the original demand order is modified, varied, or set aside in appeal or revision.
It avoids the need to start fresh recovery proceedings every time.
2. Statutory Provision – Section 84
Section 84:
Where any notice of demand in respect of any tax,
penalty, interest or any other amount payable
under this Act
is served upon a person,
and any appeal or other proceedings
is filed or initiated
against such demand,
then—
- where such demand is modified in such appeal or proceedings, the recovery proceedings, if any, initiated, shall continue to be valid but shall be limited to the amount so modified;
- where such demand is set aside in such appeal or proceedings, the recovery proceedings initiated shall be deemed to be vacated.
3. Key Situations Covered under Section 84
Section 84 operates in three scenarios:
- Demand is reduced
- Demand is increased
- Demand is completely set aside
Recovery proceedings adjust automatically to the revised demand.
4. Effect When Demand Is Reduced
If appellate authority reduces the demand:
- Recovery proceedings already initiated continue
- But only to the reduced amount
- Excess recovery must be reversed or refunded
5. Effect When Demand Is Enhanced
If demand is enhanced:
- Existing recovery proceedings remain valid
- They extend to the enhanced amount
- No fresh recovery notice is required
However, due process must be followed.
6. Effect When Demand Is Set Aside
If demand is fully set aside:
- All recovery proceedings are deemed vacated
- Attachments and garnishee proceedings must be lifted
- Amounts recovered must be refunded with interest, if applicable
7. Section 84 vs Section 79
- Section 79: Deals with mode of recovery
- Section 84: Validates continuation of recovery after modification of demand
Section 84 does not create recovery power, it regulates its continuation.
8. Interaction with Appeal Provisions
Section 84 works alongside:
- Section 107 – Appeal to Appellate Authority
- Section 112 – Appeal to Appellate Tribunal
- Section 117 – Appeal to High Court
Recovery is subject to stay orders, if any.
9. Practical Examples
- Bank attachment continues for reduced demand
- Property attachment vacated after appeal success
- Garnishee notice adjusted post appellate order
10. Judicial Principles
Courts have held that:
- Recovery cannot exceed modified demand
- Department must give effect to appellate orders promptly
- Failure to vacate recovery after set aside is illegal
11. Professional Insight
Section 84 balances administrative efficiency with taxpayer protection. While it prevents multiplicity of recovery actions, it also mandates automatic relief when demands are reduced or quashed. Monitoring appellate outcomes is critical.
Disclaimer: This article is prepared based on the CGST Act, CGST Rules, notifications and prevailing legal position as applicable till date. Actual recovery is subject to stay orders, appellate directions and factual circumstances.
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