Refund of unutilised ITC limited to statutory situations under Section 54(3), not a constitutional entitlement.
The Supreme Court has held that refund of unutilised ITC is a statutory concession confined to the specific situations set out in the refund proviso to Section 54(3), not a constitutional right, and that the proviso functions as a restriction on refunds. A High Court has recently permitted refunds where no express prohibition exists, creating an unresolved judicial divergence between permissive and restrictive approaches to refund entitlement. (AI Summary)

Audit reports under Section 65 do not themselves create a tax demand; formal adjudication under law is required.
Form ADT-02 records audit observations but does not constitute an enforceable demand; tax liabilities identified in an audit become actionable only if the proper officer initiates statutory adjudication with a show cause notice and passes an assessment order, during which the taxpayer may submit explanations, documents and obtain a hearing or may voluntarily deposit an admitted liability to the proper officer. (AI Summary)