Refund limitation runs from knowledge where cancellation was not communicated; pledged security must be returned with interest.

Limitation for refund of a dealer's security deposit was computed from the date of knowledge where the cancellation order had not been communicated and the dealer's lack of knowledge was neither disproved nor controverted. Section 9(6)(a) of the Orissa Sales Tax Act, 1947 and Rule 42-B contemplated refund of security on a timely application, but the absence of communication or Gazette publication constituted sufficient cause in the circumstances. The delay was minimal, the refund conditions were otherwise satisfied, and the security's purpose had not been defeated. The refusal to refund the pledged National Savings Certificates was therefore unsustainable, with interest payable at 6% per annum from maturity until refund.

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Issues: Whether rejection of the dealer's application for refund of the security deposit was justified on the ground that it was filed beyond six months from the date of cancellation of registration, and whether the dealer was entitled to refund of the pledged security with interest.

Analysis: Section 9(6)(a) of the Orissa Sales Tax Act, 1947 permits cancellation of registration on discontinuance of business and contemplates refund of security on an application received within six months of the date of cancellation. The rules also indicate that cancellation is to be effected on the prescribed date and published in the Gazette, but there was no material to show that the cancellation order had been communicated to the dealer. The dealer's assertion that he had no knowledge of the cancellation was neither found incorrect nor controverted by evidence. In such circumstances, computing limitation from the date of knowledge was held to be justified. Even otherwise, the delay was minimal and the absence of communication or publication constituted sufficient cause. The conditions for refund under Rule 42-B were satisfied, and the purpose of the security had not been defeated.

Conclusion: The refusal to refund the security deposit was unsustainable, and the dealer was entitled to refund of the pledged National Savings Certificates with interest at 6% per annum from the date of maturity till refund.

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