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The High Court in [2021] 435 ITR 129 (Bom) reminded the department of the caution to be exercised in the adjustment of refund against demand beyond what is requiring to be deposited in stay granted matters as per board guidelines circulars and instructions. The department’s argument that the CPC scheme clause 10 mandate a mechanized adjustment of any refund against pending demand is found to be a superficial plea.
The High Court held that the exercise of power to have set off/adjustment of refund is regulated by legislative provisions and instructions. The details referred to in clause 10 of the CPC scheme would have to correspond to the provisions and instructions operating. Function under the clause would be circumscribed by them and it would be incongruous to consider that uploading referred to in Clause 10 would mean all refunds arising are liable to be adjusted against the tax demands irrespective of the orders thereon by the authorities and/or subsisting instructions and provisions applicable.
The Court thus ordered the return of excess amount adjusted to the petitioner and further granted stay for the pending amount

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