Refund adjustment against disputed demands requires prior verification of finality before set-off can be made

Refund arising from a Tribunal order cannot be mechanically adjusted against other outstanding demands unless the finality of those demands is first verified. Where the adjustment was made against demands stated to be under appeal or still within the appeal period, the adjustment was held unsustainable because the authority had not ascertained whether those demands had attained finality. The adjustment was therefore set aside and the matter remanded to the original adjudicating authority for a fresh decision after examining the status of the confirmed demands.

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Issues: Whether the refund arising from the Tribunal's earlier order could be adjusted against other outstanding demands without first ascertaining the status of those demands.

Analysis: The refund was consequent upon the appellant succeeding before the Tribunal. The outstanding demands against which the refund was adjusted were stated to be subject to appeal or within time for appeal. In these circumstances, the refund could not be mechanically adjusted against such demands without verifying whether they had attained finality.

Conclusion: The adjustment was set aside and the matter was remanded to the original adjudicating authority for a de novo decision after ascertaining the status of the confirmed demands.

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