(1) Subject to other provision of this Act, the Commissioner shall, in the manner and within the time, as may be prescribed, refund to a dealer any amount of tax, late fee, penalty or interest paid by such dealer in excess of the amount due from him under this Act and also excess of net tax credit over output tax payable under this Act.

(2) The Commissioner shall have the power to adjust any amount due to be refunded to a registered dealer under sub-section (1) against any tax, interest, late fee or penalty due from him, in such manner, and subject to such conditions and restrictions, as may be prescribed.

(3) Where an order giving rise to a refund is the subject-matter of an appeal or revision or any other proceeding, or where any other proceeding is pending, and the Commissioner has reasons to believe that the grant of the refund to the registered dealer is likely to adversely affect the interest of revenue, the Commissioner may withhold the refund for a period not exceeding three months from the date of such order.