Recovery based on a set-aside assessment cannot stand, but lawful recovery may proceed under a fresh assessment.

Recovery proceedings based on an assessment order cannot survive once that foundational assessment has been set aside and replaced by a fresh assessment for the same year. The Court held that the demand raised under the earlier, non-operative assessment was unsustainable and set aside the recovery orders. It also clarified that the revenue's right to proceed in accordance with law on the basis of the fresh assessment remained unaffected, so any lawful recovery could still be pursued if tax remained unpaid under that later order.

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Issues: Whether the recovery proceedings could survive when they were founded on an assessment order that had already been set aside and a fresh assessment had been passed thereafter.

Analysis: The recovery orders were issued only as a consequence of the earlier assessment for 2013-2014. That assessment had been interfered with, and the record also showed that a fresh assessment order had later been made for the same year. Once the foundational assessment was no longer the operative basis for recovery, the demand raised under it could not be sustained. The Court also clarified that the revenue's right to proceed in accordance with law on the basis of the fresh assessment remained unaffected.

Conclusion: The recovery orders were unsustainable and were set aside. The relief was granted in favour of the petitioner, while the respondent was left free to pursue lawful recovery under the fresh assessment, if any amount remained unpaid.

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