(1) When any person has paid tax in respect of a motor vehicle, he shall be entitled to a refund-
(a) where an undertaking has been delivered under Sub-section (1) of section 10 in respect of such motor vehicles, which has not, in the opinion of Taxing Officer, been found to be false, by the time the application for a refund is made, and the period specified in the said undertaking, comprises any period for which tax has been paid in respect of such vehicle, for each complete calendar month of the period for which tax has been paid and which remained unexpired on the date of delivery of the said undertaking, of an amount equal to one-twelfth of the annual tax payable on such vehicle;
(b) where excess tax has been paid for any period due to over assessment by the Taxing Officer or otherwise, of the amount paid in excess of the tax payable; and
(c) where, after payment of tax in respect of a vehicle, it is found that the vehicle is not subject to tax, of the tax so paid :
Provided that no such refund shall be made unless the person claiming the refund has made an application in that behalf to the concerned Taxing Officer within one year from the date on which the refund became due and every such refund shall be subject to such conditions as may be prescribed.
(2) Any amount due to be refunded under Clause (a) or Clause
(b) or Sub-section (1) may, at the option of the applicant, be adjusted towards the tax due for any subsequent period :
Provided that if any tax or penalty due from the applicant in respect 1[of] any previous period remains outstanding, the amount to be refunded shall be first adjusted towards the outstanding dues and the balance, if any, shall refunded.