Pre-audit requirement cannot defeat an otherwise admissible refund when it is only a procedural circular instruction.

Refund otherwise admissible in law could not be denied merely because the claim had not undergone pre-audit under a Board circular. The refund had arisen from duty paid during proceedings and a pre-deposit made after confirmation of demand, and the assessee had already become entitled to repayment on succeeding in the matter. The only objection was absence of pre-audit, but this was treated as a procedural administrative requirement, not a statutory condition for grant of refund. As refund proceedings are quasi-judicial, pre-audit could not override the adjudicatory process. The refund was restored with consequential relief.

---

---

Issues: Whether refund otherwise admissible to the assessee could be denied or reversed merely because the refund claim had not undergone pre-audit under the Board circular.

Analysis: The refund arose from duty paid during the course of proceedings and from a pre-deposit made after confirmation of demand. There was no dispute that the assessee had become entitled to refund upon succeeding in the matter, and there was no infirmity pointed out in the original sanction of refund on merits. The only objection was that the refund had not been pre-audited. A circular prescribing pre-audit was treated as a procedural administrative requirement and not a statutory condition for grant of a refund that was otherwise legally due. Refund proceedings being quasi-judicial in nature, pre-audit could not override or interfere with the adjudicatory process.

Conclusion: Refund could not be denied solely on the ground of absence of pre-audit, and the assessee was entitled to the refund claim.

Final Conclusion: The impugned order was set aside and the refund was restored to the assessee with consequential relief.

Ratio Decidendi: A refund that is otherwise admissible in law cannot be rejected merely for non-compliance with a procedural pre-audit requirement contained in a circular, when such requirement is not a statutory mandate.

---