(1) The Assessing Authority either suo-moto or on an application shall, in the prescribed manner, after final determination of liability, refund to a registered dealer or any other person any amount of tax, interest or penalty paid by such dealer or any such other person under this Act, if the amount of tax, penalty or interest so paid is in excess of the amount due from him under this Act, either by a refund voucher or, at the option of the dealer or such other person, by adjustment of the amount so paid with the amount due from him, in respect of any other period:

Provided that an application for refund of any excess amount of input tax credit under sub-section (4) of Section 12, may be made by a registered dealer after the expiry of a quarter of the year and where the Assessing Authority finds that the returns for the tax period are correct and complete, it shall in the prescribed manner refund to such registered dealer the excess amount of input tax credit or allow it to be carried forward to the next tax period:

Provided further that an application for refund of input tax credit and subsequent approval for such refund may also be made electronically in the prescribed manner.

Provided further that where any investigation, scrutiny, inspection or audit or other enquiry is pending against the registered dealer, and the officer authorised to sanction the refund is of the opinion that the payment of such refund is likely to adversely affect the revenue, which may become due from such registered dealer at the conclusion of such investigation, scrutiny, inspection or audit or other enquiry, he may, for reasons to be recorded in writing, either refund the amount of excess input tax credit subject to furnishing of a security equal to the amount to be refunded to such registered dealer or withhold the refund till such time the proceedings are concluded;

Provided further that no refund under this section shall be allowed unless the claim for refund is made within a period of three years from the date on which such claim accrues.

(2) Where any amount required to be refunded by the Assessing Authority to any person by virtue of an order sanctioning such refund issued under this Act is not refunded to him within ninety days of the date of the order, the dealer shall be entitled to get simple interest on such amount at the rate of one percentum per month from the date immediately following the date of expiry of the said period for a period of one month and thereafter at the rate of one and a half percentum per month till the refund is made.

(3) Notwithstanding anything contained in sub-section (1) or (2), the Assessing Authority shall first adjust the amount to be refunded towards the recovery of any amount due from the dealer on the date of such adjustment, and shall thereafter refund the balance, if any.

(4) If the delay in allowing refund within the aforesaid period of ninety days is for reasons beyond the control of the Assessing Authority or attributable to the dealer, whether wholly or in part, the period of such delay shall be excluded from the period for which interest is payable.

(5) If any question arises whether any period is to be excluded for the purposes of calculation of interest under sub-section (4), the same shall be referred to the Commissioner, or such other officer as the State Government may, by notification, appoint, whose decision shall be final.

(6) Where an order allowing refund is the subject-matter of any appeal or further proceedings or where any other proceedings under this Act are pending, and the Assessing Authority is of the opinion that the refund is likely to adversely affect the recovery, the Assessing Authority may withhold the refund and refer the case to the Commissioner whose orders shall be final.

(7) The period during which the refund remains withheld under sub-section (6) shall be excluded for the purpose of calculation of interest under this section.