Cross-adjustment of tax refund against separate enactment dues is impermissible without express authority and prior notice.

Refund payable under the CST Act could not be unilaterally adjusted against admitted interest dues under the Orissa Entry Tax Act in the absence of express statutory authority and prior notice. The two liabilities arose under distinct enactments, and the mere fact that the same authority administered both statutes did not permit cross-adjustment or garnishee-type recovery. The adjustment order was therefore unsustainable and the refund could not be withheld on that basis, while the department retained the right to recover the admitted interest liability separately in accordance with law.

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Issues: Whether the refund payable under the CST Act could be unilaterally adjusted against the admitted interest liability under the Orissa Entry Tax Act without express statutory authority and without prior notice.

Analysis: The refund due under the CST Act and the interest liability under the Orissa Entry Tax Act arose under distinct enactments and in distinct statutory capacities. The existence of a charge or recoverable liability under the Orissa Entry Tax Act did not by itself authorise straightaway adjustment of the refund payable under the CST Act. In the absence of an express enabling provision permitting such cross-adjustment, the action could not be treated as garnishee-type recovery. The adjustment was also made without any notice to the assessee, which rendered the action unsustainable.

Conclusion: The unilateral adjustment was illegal and liable to be set aside; the refund could not be withheld on that basis, though the department remained free to recover the admitted Orissa Entry Tax interest dues in accordance with law.

Final Conclusion: The impugned adjustment order was quashed and the assessee was entitled to receive the CST refund, while the department's right to proceed separately for recovery of the admitted interest liability was preserved.

Ratio Decidendi: In the absence of express statutory authority and prior notice, a refund payable under one tax enactment cannot be unilaterally adjusted against dues under another enactment merely because the same authority administers both statutes.

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