CHAPTER VII
REFUND
Refund of Tax
39. (1) Subject to the provisions of this Act and the rules made thereunder, the Commissioner or the designated officer shall, in such manner and within such period, as may be prescribed, refund to a person, the amount of tax, penalty or interest, if any, paid by such person in excess of the amount due from him and also the excess of input tax credit over output tax payable under this Act. The refund may either be by refund voucher or at the option of the person, by refund adjustment order as may be specified:
Provided that, the Commissioner or the designated officer shall first apply such excess amount towards the recovery of any amount due in respect of which a notice under section 29 has been issued or any amount, which is due, but not paid, as the case may be, and shall refund the balance, if any.
(1A) Notwithstanding anything contained in sub-section(1), where an application for claim of refund is submitted by a person on the basis of his monthly or quarterly return, as the case may be, the designated officer may, after adjusting any recovery, if due against such person, provisionally allow seventy-five percent of the amount of refund claimed, but not exceeding one crore rupees, on furnishing of an indeminity bond in the prescribed form, subject to such terms and conditions, as may be prescribed:
Provided that if such terms and conditions are not complied with by the taxable person, he shall be liable to pay due tax along with penalty at the rate of two percent per month and interest in accordance with the provisions of section 32 on the tax so due from the date of filing of the return.
(2) Where any refund is due to any taxable person or registered person according to the return furnished by him for any period, such refund may provisionally be adjusted by him against the tax due and payable as per the returns furnished under section 26 for any subsequent period:
Provided that the amount of tax or penalty or interest or all of these, due from, and payable by, the taxable person or the registered person, as the case may be, on the date of such adjustment, shall first be deducted from such refund while making adjustment:
Provided further that where an application for claim of refund is submitted by a person on the basis of his monthly return, the designated officer shall provisionally allow seventy five per cent of the amount of such claim, against submission of indemnity bond in the prescribed form for the amount, equal to the amount of refund claimed in the application, and after the receipt of the forthcoming quarterly returns, the genuineness of the claim , he shall determine the final amount of refund. |