Pre-suit interest on illegal sales tax refund was unavailable absent statute, contract, or recognised equitable basis.

Pre-suit interest on refund of sales tax collected under an assessment later held illegal was not recoverable because no recognised basis existed for such interest. The Interest Act, 1839 applies only to a debt or sum certain payable at a fixed time under a written instrument, while section 34 CPC governs only interest from the date of suit and does not create a pre-suit entitlement. Section 144 CPC was inapplicable because it concerns variation or reversal of court decrees, not tax assessments by revenue authorities. The governing sales tax provisions and amended rules contemplated refund of excess tax without interest, and the claim did not fall within contractual, statutory, tortious, or equitable grounds.

---

---

Issues: Whether interest was payable on sales tax collected under an assessment later declared illegal, for the period between collection and the decree of refund.

Analysis: Interest before suit is recoverable only where there is an agreement, a usage of trade, a substantive statutory right, or a case attracting the Court's equitable jurisdiction. The Interest Act, 1839 applies only to a debt or sum certain payable at a certain time by virtue of a written instrument, and its proviso preserves only interest otherwise payable by law. Section 34 of the Code of Civil Procedure, 1908 governs only interest from the date of suit and does not create a right to pre-suit interest. Section 144 of the Code of Civil Procedure, 1908 applies only where a decree or order of a Court is varied or reversed and does not cover a tax assessment by revenue authorities. The sales tax provisions and the amended rules expressly contemplated refund of excess tax without interest, and the claim could not be treated as tortious or as falling within general equitable grounds.

Conclusion: Interest on the illegally collected sales tax for the period prior to the decree was not recoverable. The assessee's claim failed and the revenue's objection succeeded.

Ratio Decidendi: Pre-suit interest cannot be awarded on refund of tax collected under an assessment later held illegal unless the claim falls within a recognised statutory right, contractual entitlement, or a specific equitable category attracting jurisdiction to award interest.

---