Refund of excess estate duty carries mandatory interest; authority may fix only the rate under the statutory scheme.

Under section 64(7) of the Estate Duty Act, 1953, a refund of excess estate duty following reduction of the assessment carries an obligation to pay interest. The discretion under the provision was confined to fixing the rate of interest, not to deciding whether interest was payable at all. As the assessment had been reduced in appellate and reference proceedings and the refund was made much later, interest on the refunded amount was directed to be paid at six per cent.

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Issues: Whether the petitioner was entitled to interest on the refunded estate duty amount under section 64(7) of the Estate Duty Act, 1953, and whether the authority had discretion only as to the rate of interest.

Analysis: The assessment was reduced following appellate and reference proceedings, and the refund of the overpaid estate duty was made much later. Section 64(7) governs refund of overpaid estate duty where an assessment is reduced as a result of reference proceedings, and the statutory scheme requires refund with interest. The discretion contemplated by the provision was held to relate to the rate of interest, not to the existence of the obligation to pay interest.

Conclusion: The petitioner was entitled to interest on the refunded amount, and the respondent could determine only the rate. Interest at six per cent was directed to be paid.

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