(1) If a registered dealer files any returns or produces any other evidence as required by or under this Act, and the return or evidences produced show any amount to be refundable to the dealer, then the dealer may apply in the prescribed form to the prescribed authority for grant of provisional refund.
(2) The prescribed authority may require the said dealer to furnish such security as may be prescribed for an amount equal to the amount of refund and on receipt of such security, the prescribed authority shall, subject to rules, grant the dealer a provisional refund of the amount claimed refundable as aforesaid.
(3) (a) Subject to other provisions of this Act, the refund under sub-section (1) shall be deemed to be final if the dealer has no liability under the Act as per his annual return filed under section 24 and the report submitted under sub-section (2) of section 54.
(b) Upon the said refund being final, the security, if any, furnished under sub-section (2) shall be returned to the said dealer.
(c) If any amount in excess of the amount refunded under sub-section (1) is found to be payable by the said dealer in respect of the period for which he had claimed and was allowed such provisional refund, such excess shall be recovered as arrears of tax from the dealer and he shall be liable to pay simple interest on such excess amount at the rate of one and half per cent. per month or part thereof from the date of grant of provisional refund till the date of the payment of such excess amount.