Interest on refunded sales tax is payable from the statutory due date, with rates changing when the law is amended.

Refunded sales tax amounts under section 44 of the Kerala General Sales Tax Act, 1963 carried interest from the date the revised assessment orders made them refundable, because non-payment beyond the statutory period attracted liability for delay. Pendency of further proceedings did not suspend that liability. The assessee was therefore entitled to refund with interest, but only at the statutory rates applicable for each period: 6% for the earlier period and 10% after the enhancement effective on 29 July 1996. The claim for a higher rate throughout was rejected.

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Issues: Whether the assessee was entitled to interest on the refunded sales tax amounts under section 44 of the Kerala General Sales Tax Act, 1963, and the applicable rate and period of such interest.

Analysis: The refunded amounts arose from revised assessment orders that had been passed pursuant to appellate directions and later came to be the subject of further proceedings. The Court held that the amounts became refundable from the dates of the revised orders, and that non-payment beyond the statutory period attracted interest under section 44. It further held that the pendency of further proceedings did not absolve the assessing authority from liability to pay interest for the period of delay. The Court declined to grant a higher rate for the entire period, but applied the enhanced statutory rate after the amendment taking effect on 29 July 1996.

Conclusion: The assessee was entitled to refund with interest, but only at the statutory rate, with 6% interest for the earlier period and 10% interest for the period after the statutory enhancement; the claim for higher interest for the whole period was not accepted.

Ratio Decidendi: Where a refundable tax amount remains unpaid beyond the period prescribed in section 44 of the Kerala General Sales Tax Act, 1963, interest becomes payable from expiry of that period at the rate then statutorily applicable, and subsequent proceedings concerning the assessment do not extinguish liability for delayed payment.

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