Can refund be withheld by the department?

Yes, refund can be withheld in the following
circumstances:
• If the registered dealer has not submitted
return(s), till he files the return(s);
• If the registered taxable person is required to pay
any tax, interest or penalty which has not been
stayed by the appellate authority/Tribunal/
court, till he pays such tax interest or penalty;
[The proper officer can also deduct unpaid
taxes if any of the dealer from the refundable
amount].
• Commissioner/Board can withhold refund, if,
the Order of Refund is under appeal and he is
of the opinion that grant of such refund will
adversely affect revenue – (Sec.38(9) of MGL).