Refund withholding under tax law requires pending proceedings against the same assessment, not parallel litigation elsewhere.

Refund under section 52A of the Gujarat Sales Tax Act could be withheld only when the assessment order generating the refund was itself subject to appeal or another pending proceeding. Where the assessment had attained finality, no appeal, revision, reassessment or rectification was pending, and the reassessment notice had been withdrawn, withholding the refund merely because another assessee's case on the same legal issue was in appeal was not justified. The provision could not be stretched to create arbitrary detention of a final refund. The refund was therefore to be released with statutory interest.

---

---

Issues: Whether refund arising from a final assessment could be withheld under section 52A of the Gujarat Sales Tax Act, 1969 merely because the department had filed an appeal in another assessee's case on the same legal issue, when no appeal, revision, reassessment or rectification proceeding was pending against the petitioner's own assessment.

Analysis: The assessment order granting refund had attained finality and was not under appeal, revision, reassessment or rectification. The time limits for reassessment and revision had expired, and the reassessment notice earlier issued had been withdrawn. Section 52A authorises withholding of refund only where the refund-giving order is itself the subject matter of an appeal or further proceeding, or where another proceeding under the Act is pending in relation to that order. That provision cannot be extended to withhold refund merely because some other litigation on the same legal question is pending, since such an interpretation would confer arbitrary power and disconnect the withholding power from the assessment order that generated the refund.

Conclusion: The withholding of refund was unjustified and the petitioner was entitled to release of the refund with statutory interest.

Ratio Decidendi: Refund under section 52A can be withheld only when the very assessment order giving rise to the refund is under appeal or other pending proceeding, and not merely because an unrelated or separate case on the same point of law is pending elsewhere.

---