Refund Adjustment Post-Processing Period Deemed Unjustified; Court Orders Refund with Interest u/s 42.

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....Recovery of dues by adjusting them against the refund amount - Delay in processing refund - In this case, the default notices were issued after the period within which the refund should have been processed. According to Sub-section (2) of section 38 of the Act, adjustment of amounts is permitted only towards recovery that is "due under the Act." - However, by the time the refund should have been processed, the dues under the default notices had not crystallized, and the respondent was not liable to pay them at that time. Therefore, the appellant-department's action of retaining the refund amount beyond the stipulated period and adjusting it against amounts due under subsequent default notices was deemed unjustified by the Supreme Court. - Therefore, the Court affirmed the judgment of High Court directing the refund of amounts along with interest as provided under Section 42 of the Act.....