Statutory withholding of refund was upheld where pending proceedings and prior approval justified protection of revenue.

Refund arising from assessments set aside in appeal may still be withheld under the statute when further proceedings remain pending and the assessing authority, with prior approval of the competent authority, forms the opinion that immediate refund is likely to prejudice revenue. The record showed that approval was obtained and the withholding order was validly made, so the writ court could not compel immediate refund at that stage. The statutory mechanism for withholding refund was therefore upheld, while completion of assessment within the stipulated time and consequential refund with interest, if assessments were not completed, remained part of the operative direction.

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Issues: Whether the assessee was entitled to immediate refund of the sales tax collected pursuant to assessments that had been set aside in appeal, or whether the refund could validly be withheld under the statutory power pending fresh assessment.

Analysis: Refund became due on the appellate setting aside of the assessments, but the Act also empowered the assessing authority to withhold refund where the refund order was the subject-matter of further proceedings and the authority formed an opinion, with the previous approval of the Deputy Commissioner, that grant of refund was likely to adversely affect revenue. The record showed that the assessing authority sought approval, the Deputy Commissioner granted permission, and the assessing authority thereafter passed the withholding order. The statutory conditions for invoking the withholding power were therefore satisfied, and the writ court could not direct immediate refund in the face of that valid exercise of power.

Conclusion: The challenge to withholding of refund failed, and the assessee was not entitled to an immediate refund at that stage.

Final Conclusion: The statutory mechanism for withholding refund was upheld, and the petitions were dismissed, subject to the direction for completion of assessment within the stipulated time and consequential refund with interest if the assessments were not completed.

Ratio Decidendi: Where the statutory preconditions are met, refund due on appeal may be withheld by the assessing authority with prior approval of the competent authority until the pending proceedings are completed.

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