Refund adjustment requires a crystallised entitlement before set-off against later tax dues, leaving interest liability intact.

A refund can be adjusted against later tax dues under section 52 only after it has been determined by the competent authority as an excess payment; an anticipated or uncrystallised refund is not available for unilateral set-off in a return or revised return. Because the assessee's entitlement to the earlier-period refund was adjudicated only later, there was no legal basis to adjust it against the subsequent period's liability when the adjustment was claimed. On that footing, the Tribunal's view that interest under section 47(4A)(b) remained payable was found to involve no legal infirmity, and the issue was decided against the assessee.

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Issues: Whether refund not yet determined for an earlier period could be unilaterally adjusted against tax dues of a subsequent period under section 52, so as to avoid levy of interest under section 47(4A)(b).

Analysis: The right to claim adjustment under section 52 arises only after the refund has been determined by the competent authority as an amount paid in excess of the amount due. An anticipated or uncrystallized refund cannot be treated as available for adjustment in the return or revised return against a later tax liability. Since the assessee's entitlement to refund for the earlier year was adjudicated only later, there was no legal basis for setting it off against the tax dues of the subsequent year at the time it was sought. On that footing, the Tribunal's view that interest under section 47(4A)(b) remained payable involved no legal infirmity.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

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