1. As a Service Provider /Vendor, you are legally bound to complete Clients work within a decided /reasonable time frame, more so when you have committed your services by taking advance payment.
2. IF Client's work is not completed within decided /agreed time frame, THEN the Service Provider is guilty of Breach of Contract /work ethics and the Client is entitled to cancel his work and seek refund. Prosecution can be initiated against you for negligence, deficiency, trade malpractices, etc....
3. It is immaterial /ill-logical to admit, that you even after one year, you have completed only 50% work for such a small assignment. Either settle amicably with Client, or refund his amount, to avoid falling into legal issues.
Keep Smiling .... Hemant Agarwal