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Issues: (i) Whether the petitioner was entitled to refund of the amount deposited at the time of filing the appeal after the penalty order had been set aside; (ii) Whether the petitioner was entitled to interest on the withheld refund in the absence of any valid order withholding refund.
Issue (i): Whether the petitioner was entitled to refund of the amount deposited at the time of filing the appeal after the penalty order had been set aside.
Analysis: Sections 43 and 44 of the Haryana General Sales Tax Act, 1973, together with Rule 35(1)(a) of the Haryana General Sales Tax Rules, 1975, require the Assessing Authority to refund excess tax, penalty, or interest, subject to lawful adjustment against existing dues. Refund can be withheld only where the statutory conditions are satisfied and the competent authority passes an order under Section 44. No such order or supporting material was produced to justify retention of the amount after the penalty stood quashed.
Conclusion: The petitioner was entitled to refund of the deposited amount, and the continued retention of the sum was unjustified and unlawful.
Issue (ii): Whether the petitioner was entitled to interest on the withheld refund in the absence of any valid order withholding refund.
Analysis: Section 43(2) of the Haryana General Sales Tax Act, 1973 provides for interest where a refundable amount is not returned within the prescribed period. Since the refund was not withheld under Section 44 and no lawful justification was shown for non-payment, the delay in refund attracted interest. The court also treated the failure to refund as offending the petitioner's right to property.
Conclusion: The petitioner was entitled to interest on the refunded amount from the expiry of the prescribed period after the refund application was made.
Final Conclusion: The writ petition succeeded, and the respondents were directed to return the deposited amount with statutory interest for the period of wrongful retention.
Ratio Decidendi: Refund under the sales tax law becomes mandatory once excess payment is established, and in the absence of a valid order lawfully withholding refund, the authority must release the amount with interest for delayed payment.
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