(a) If, not later than four years after the date on which any contributions, penalties, or interest became due, an employer who has paid such contributions, penalties, or interest thereon shall make application for an adjustment thereof in connection with subsequent contribution payments, or for a refund thereof because such adjustment cannot be made, and the secretary shall determine that such contributions, penalties, or interest, or any portion thereof, was erroneously collected, the secretary shall allow such employer to make an adjustment thereof in connection with subsequent contribution liability, or, if such adjustment cannot be made, the secretary may refund such contributions, interest, and penalties from the clearing account. Any refund of interest and/or penalties which have been transferred to the Special Employment Security Administration Fund shall be made from the Special Employment Security Administration Fund, provided for in Section 25-4-142. If the secretary shall deny, in whole or in part, any such application, the applicant may within 60 days after notice of such action, to be given by the secretary by mail, appeal to the circuit court of the county wherein is the principal place of business of the applicant, and the trial in that court shall be without a jury, and the court shall render such judgment as the facts and circumstances warrant. For like cause and within four years, adjustment or refund may be made on the secretary's own initiative.

(b) The amount of any adjustments or refunds made under this section shall be reduced by the sum of any benefits that shall have been paid based on the wages on which contributions are to be refunded. Such reduction shall be made first from the employee contributions withheld from wages of those employees to whom such benefits were paid and the remainder from the employer contributions; provided, however, that no such reduction in the amount of any adjustment or refund under this section shall be made if such contributions were paid under protest and such benefits were paid prior to final adjudication of such protest.

(c) Before any adjustment or refund may be made under the provisions of this section, the employer must conform to applicable rules and regulations of the secretary with respect to the refund to the employees entitled thereto of any moneys deducted by the employer in accordance with the provisions of this chapter.