Statutory entitlement to interest on tax refund cannot be created by equity when the fiscal statute is silent.

Interest on refund of sales tax was not payable where the fiscal statute confined interest liability to the specific situations covered by sections 33-E and 33-F of the Andhra Pradesh General Sales Tax Act. The assessee's claim, arising from tax collected on the mistaken higher classification of agarbathies, fell outside those provisions, and the Court held that rights and liabilities in a taxing statute must be found within the statute itself. An equitable claim under Article 226, or reliance on the Interest Act, 1978, could not create an independent entitlement to interest. The refund claim for interest therefore failed.

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Issues: Whether the assessee was entitled to interest on the excess sales tax refunded or adjusted, in the absence of a specific statutory provision, on the basis of equity and Article 226 of the Constitution of India.

Analysis: The claim for interest arose from refund of tax collected on the footing that agarbathies were wrongly classified and taxed at a higher rate. The statutory scheme under the Andhra Pradesh General Sales Tax Act, 1957 provided interest on refunds only in the situations covered by sections 33-E and 33-F. The assessee's claim did not fall within those provisions. In a fiscal statute, the Court held that rights and liabilities must be found within the statute itself, and an equitable claim cannot be accepted where the Legislature has specifically limited the cases in which interest is payable. The reference to the Interest Act, 1978 did not furnish any independent basis for relief under Article 226.

Conclusion: The assessee was not entitled to interest on the refunded amount in the absence of a statutory entitlement, and the claim failed.

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