Section 5(12) in Gujarat Value Added Tax Rules, 2006
(12)The amount so deposited towards security shall not be adjusted by the dealer against his liability to pay tax, penalty or interest under the Act, or under the Central Act. Such amount may be refunded on an application made by a dealer after two years from the date of registration if it is not required further for the purpose of realization of tax, interest or penalty or at the time of cancellation of registration, or at the time of rejection of application for registration, whichever is earlier:Provided that the amount of tax, penalty, interest or any other dues under the Act, or under the Central Act, due from and payable by the dealer on the date of such refund, shall be first deducted from such refund.
