(1)The Commissioner shall refund to a person the amount of tax and penalty, if any, paid by such person in excess of the amount due from him. The refund may be either by cash payment or, at the option of the person, by deduction of such excess from the amount of tax and penalty due in respect of any other period:Provided that, the Commissioner shall first apply such excess towards the recovery of any amount due in respect of which a notice under sub-section (6) of section 4 has been issued, and shall then refund the balance, if any.(2)Where any refund is due to any proprietor or person according to the returns furnished by him for any period, such refund may provisionally be adjusted by him against the tax due and payable as per the returns furnished under section 4 for any period:Provided that, the amount of tax or penalty or interest or all of them due from, and payable by, the proprietor or the person on the date of such adjustment shall first be deducted from such refund before making adjustment.
