Recovery demand cannot include tax already paid; bank attachment based on excess demand is unsustainable to that extent.

A recovery demand cannot include tax already discharged by the taxpayer, and any attachment based on that excess demand is unsustainable to that extent. The Court found that the notice and confirmed demand were meant to recover only interest, yet the recovery order wrongly added the paid tax component. The demand was therefore restricted to the interest liability alone, and the bank account attachment was directed to be lifted forthwith insofar as it rested on the disallowed tax demand.

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Issues: Whether the recovery demand could include tax already paid by the petitioner, and whether the bank account attachment could be sustained while only the interest component remained recoverable.

Analysis: The tax component had already been paid, while the show cause notice and the confirmed demand were intended to recover only interest. The recovery notice, however, also included the tax amount already discharged. On the material before the Court, the demand for the already-paid tax was unsustainable, though the interest liability remained payable. The consequential attachment of the petitioner's bank account could not survive in the form in which it was made.

Conclusion: The demand was sustained only to the extent of the interest component, and the bank attachment was ordered to be raised forthwith.

Final Conclusion: The impugned recovery order was modified to exclude the already-paid tax amount, with only the interest component recoverable from the petitioner.

Ratio Decidendi: A recovery demand cannot validly include tax that has already been paid, and any attachment founded on such excess demand is unsustainable to that extent.

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