39. Refund Adjustment Order

(1) Where any person becomes entitled to refund under the Act, the Commissioner shall first adjust the amount of refund towards the liability of tax, penalty or interest from such person.
(2) If the applicant desires the payment by adjustment against any amount payable by him, the Commissioner shall make out a Refund Adjustment Order in Form 308 authorizing the applicant to adjust the sum to be refunded against any amount payable by him in respect of the period for which a return is to be furnished under rule19 during which the refund is sanctioned or any subsequent period or tax payable on account of any notice under section 42.
(3) When the Refund Adjustment Order under rule 40 is furnished with the return, the Commissioner shall cancel his own copy as well as the copy of the person to whom the refund was granted