Contingent demand cannot justify withholding a sanctioned refund when the existing demand has already been set aside.

A sanctioned refund could not be withheld or adjusted against a demand that had already been set aside and was no longer in existence. Because the liability depended only on a possible future reconfirmation in de novo proceedings, it remained contingent and could not justify retaining the refund. The refund was therefore directed to be paid to the assessee.

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Issues: Whether a refund already sanctioned could be withheld or adjusted against a demand that had ceased to exist and was only liable to arise again in future proceedings.

Analysis: The demand against which the refund had been adjusted stood set aside and was not then in existence. A sanctioned refund could not be retained against a liability that was only contingent upon a possible future reconfirmation in de novo proceedings.

Conclusion: The refund could not be kept back, and the amount sanctioned as refund was directed to be paid to the assessee.

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