Refund interest under the Orissa Sales Tax Act cannot be denied unless statutory withholding conditions are strictly met.

Statutory interest on delayed refund accrues under Section 14-C of the Orissa Sales Tax Act, 1947 when refundable amounts are not paid within the prescribed ninety-day period from receipt of the refund application. Section 14-D can justify withholding only where the refund order itself is the subject of an appeal or further proceeding and the Commissioner considers the refund likely to prejudice revenue. As no such proceeding existed, Section 14-D could not be used to deny interest, and the refusal to grant interest was quashed with directions to pay interest.

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Issues: Whether the dealer was entitled to statutory interest on delayed refund under Section 14-C of the Orissa Sales Tax Act, 1947, and whether Section 14-D of the Orissa Sales Tax Act, 1947 could be invoked to deny such interest in the absence of any appeal or further proceeding against the refund order.

Analysis: Section 14-C provides for payment of interest where refundable amounts are not paid within ninety days from receipt of the refund application. Section 14-D permits withholding of refund only where the order giving rise to refund is the subject-matter of an appeal or further proceeding under the Act and the Commissioner is of the opinion that grant of refund is likely to adversely affect the revenue. The facts showed that the refund was not withheld in any proceeding of that kind. The interpretation that movement of papers from one stage to another constituted further proceedings under the Act was held to be unsustainable and showed non-application of mind.

Conclusion: Section 14-D was inapplicable, and the dealer was entitled to statutory interest under Section 14-C. The rejection of interest was quashed and directions were issued for payment of interest.

Ratio Decidendi: Interest on refundable tax amounts becomes payable under the refund-interest provision when refund is not made within the prescribed period, and the withholding provision can be invoked only in the specific circumstances expressly stated in the statute.

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