Refund withholding requires recorded opinion that payment will prejudice revenue, not merely the existence of an appeal.

Refund under section 14-D of the Orissa Sales Tax Act could be withheld only if the underlying order was in appeal or further proceeding and the Commissioner formed and recorded an opinion, on relevant material, that grant of refund was likely to adversely affect revenue. The existence of an appeal alone was insufficient. As no such recorded opinion appeared in the record, the withholding order was unsustainable and was set aside; the refund application was remitted for fresh disposal.

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Issues: Whether the Commissioner could withhold refund under section 14-D of the Orissa Sales Tax Act, 1947 without recording the requisite opinion that grant of refund was likely to adversely affect the revenue.

Analysis: Section 14-D authorises withholding of refund only where the order giving rise to refund is the subject of an appeal or further proceeding and the Commissioner forms an opinion that grant of refund is likely to adversely affect the revenue. The existence of an appeal by itself is not enough. The statutory condition precedent is the formation of an actual opinion on relevant material, and that opinion must be recorded before refund is withheld. On examination of the record, no such opinion had been recorded by the Commissioner. A mere reference to section 14-D could not satisfy the mandatory requirement.

Conclusion: The order withholding refund was unsustainable and was set aside. The refund application was directed to be disposed of afresh.

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