Refund cannot follow final assessment unless rectification is allowed; timely rectification application must still be decided on merits.

A refund could not be directed while the assessment order and the order rejecting rectification had attained finality, because refund would arise only after the assessment was lawfully altered through rectification under Section 33. The refund direction was therefore unsustainable. A timely rectification application, however, had to be examined on merits, and delay in disposal could not defeat consideration of that application. The assessing authority was required to decide whether rectification was permissible under Section 33 after giving the respondent an opportunity of hearing. The refund direction was set aside, while the rectification claim was kept alive for fresh consideration.

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Issues: (i) Whether a refund could be directed when the assessment order had attained finality and the rectification application remained pending. (ii) Whether the rectification application under Section 33 was required to be considered on merits by the assessing authority.

Issue (i): Whether a refund could be directed when the assessment order had attained finality and the rectification application remained pending.

Analysis: The assessment order had not been set aside and the order rejecting rectification had also attained finality. A refund could not be ordered merely on the premise that the rectification request had not been decided earlier. Refund, if any, could arise only after the rectification application was examined and allowed in accordance with law.

Conclusion: The direction to refund the tax amount was unsustainable.

Issue (ii): Whether the rectification application under Section 33 was required to be considered on merits by the assessing authority.

Analysis: The rectification application had been filed within time, and the delay in disposal could not defeat consideration of the application on merits. The assessing authority was required to examine whether rectification was permissible under Section 33 and then pass an appropriate order after hearing the respondent.

Conclusion: The assessing authority was directed to consider the rectification application afresh and pass orders in accordance with law after affording an opportunity of hearing.

Final Conclusion: The appeal succeeded to the extent that the refund direction was set aside, while the rectification claim was kept alive for fresh consideration by the assessing authority.

Ratio Decidendi: A refund cannot be ordered unless and until the underlying assessment is altered through a lawful decision on rectification, but a timely rectification application must still be decided on merits with due hearing.

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