Refund claim of an assessee must be examined in light of circular in force as of the date of application for such refund:

Petitioner moved an application for refund arising to it which was appropriate in light of the CBDT circular prevalent at that point of time. Since, the Department did not respond to the said application for a considerable time, another letter reminding about the same was addressed to AO. During the pendency of such application, CBDT came out with another circular superseding the earlier circular and according to provisions of the said circular, Petitioner was ineligible for the said refund and the Department denied the said refund on the strength of such subsequent circular. It was held that the Department cannot process application of an assessee after an indefinite period of time and apply a rule that may have changed in the meantime by virtue of change in circular. Hence, the refund claim of the Petitioner must be examined in light of the circular in force as of the date of application.

[MARDIA CHEMICALS LTD. - SCA 4141 of 2001 - GHC &

 FAG BEARINGS INDIA LTD. - SCA 11132 of 2002 - GHC]