Refund adjustment against recoverable dues upheld where no stay protected the alleged tax demand.

A refund payable to an assessee may be adjusted against other recoverable dues where the statutory power permits deduction of amounts owing to the assessee from money otherwise refundable. The Tribunal distinguished the cited refund precedent, holding that deposit of the amount during pendency of appeal did not by itself bar adjustment. Because the assessee did not show that the alleged dues were under appeal or protected by a stay of recovery, the Assistant Commissioner was entitled to make the adjustment. The challenge to the set-off therefore failed.

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Issues: Whether a refund amount refundable to the assessee could be adjusted against another amount stated to be due and payable by the assessee under the recovery provisions.

Analysis: The Tribunal held that the cited precedent on refund did not prohibit adjustment merely because the amount had been deposited during pendency of appeal. It noted that the assessee failed to show that the alleged dues were themselves under appeal with recovery stayed. Relying on the statutory power permitting deduction of amounts payable to the assessee from money owing to it, the Tribunal held that the Assistant Commissioner was entitled to effect adjustment of the refund against the recoverable dues.

Conclusion: The adjustment was upheld and the challenge to it failed.

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