Recovery proceedings cannot rest on a superseded demand notice after appellate reduction of assessment and must follow the modified liability.

Recovery proceedings founded on an original notice of demand cannot continue unchanged after an appellate order reduces the assessment and supersedes the demand. The legal scheme treats the notice of demand as the foundation of recovery, so default must be tested against the amount lawfully payable under the modified assessment or appellate order. Where the original demand no longer reflects the liability, recovery must proceed on the revised demand basis rather than on the superseded notice. The dissent considered that the original default could survive with adjustment of the recoverable amount, but the majority view prevailed and relief was granted against the existing recovery proceedings.

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Issues: Whether recovery proceedings founded on a notice of demand and certificate issued on the original assessment could continue after the assessment was reduced in appeal without issuing a fresh notice of demand.

Analysis: The legal scheme treated a notice of demand as the foundation of recovery and made default depend on non-compliance with the amount specified in that notice or in an appellate order specifying payment particulars. The majority held that when an assessment is modified on appeal so that the original demand is replaced or superseded, the earlier default and the proceedings based upon it cannot survive in their original form; recovery must then proceed on the basis of the modified demand. The dissenting opinion took the view that the original default continued, subject to adjustment of the amount recoverable, and that a fresh demand notice was not necessary merely because the assessment was reduced.

Conclusion: The appeals were dismissed and the High Court's view was upheld; the assessee succeeded on the question of invalidity of the existing recovery proceedings after appellate reduction of the assessment.

Final Conclusion: Recovery based solely on the original demand could not be sustained after the appellate reduction of the assessment, and the assessee was entitled to relief against those proceedings.

Ratio Decidendi: When an assessment is replaced or superseded by an appellate order so that the original demand no longer represents the amount legally payable, recovery proceedings founded on the original demand cannot continue without adjustment to the modified demand.

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