Refund interest and damages for delayed tax proceedings require a statutory basis and specific proof of wrongful conduct.

Article 226 relief for compensation, damages or interest on refund was denied because no specific statutory basis existed for interest on interest or damages arising from delay in disposal of the appeal and assessment proceedings. The court noted that, although tax jurisprudence may allow interest where the statute recognises liability to pay interest on excess tax retained, that principle did not apply here. Section 85 of the Gujarat Sales Tax Act, 1969 was treated as protective, and mere delay in deciding an appeal or assessment did not by itself create a right to damages or interest. Any claim based on negligence or wrongful conduct required specific pleading and proof, which was absent.

---

---

Issues: Whether the petitioner was entitled under Article 226 to compensation, damages or interest on refunds on account of delay in disposal of the appeal and assessment proceedings, and whether such delay justified judicial interference.

Analysis: The claim for interest was examined against the background of refund becoming due after the appellate order and the absence of any specific statutory provision creating a right to interest on interest or damages for delay. The Court considered the general principle relied upon from income-tax jurisprudence that interest may follow where the statute recognises liability to pay interest on excess tax retained, but found that the present case involved no comparable statutory basis. It also referred to the protective effect of Section 85 of the Gujarat Sales Tax Act, 1969, and held that mere delay in disposal of an appeal or assessment does not by itself create a right to damages or interest. Any claim for negligence or wrongful conduct required specific factual pleading and proof.

Conclusion: The petitioner was not entitled to interest or damages on account of delay, and no case for interference was made out.

---