(1) Where an order giving rise to refund is the subject matter of an appeal or further proceedings or where any other proceedings under this Act is pending, and the Prescribed Authority is of the opinion that the grant of such refund is likely to adversely affect the revenue and that it may not be possible to recover the amount later, the Prescribed Authority may, withhold the refund till such time as he may determine.

(2) Where a refund is withheld under sub-section (1) the dealer shall be entitled to interest as provided under sub-section (1) of section 52, if as a result of the appeal or further proceedings or any other proceedings he becomes entitled to the refund.