Statutory refund cannot be withheld on a mere revision reference; delayed refund attracts interest subject to adjustment.

Refund of penalty under the Haryana General Sales Tax Act could not be withheld merely because the appellate order had been referred in revision; withholding was permissible only under the statute and on the specified grounds. A mere reference for revision, without an order under the withholding provision and without the required statutory basis, did not justify retention of the deposited amount. Once refund became due, the delay in repayment attracted interest, subject to adjustment against any outstanding demand within the permitted period. The dealer was therefore entitled to refund of the penalty amount with interest, and the refusal to release the refund was held unjustified.

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Issues: (i) Whether refund of penalty deposited under the Haryana General Sales Tax Act, 1973 could be withheld merely because the order allowing the dealer's appeal had been referred for revision. (ii) Whether the dealer was entitled to refund with interest.

Issue (i): Whether refund of penalty deposited under the Haryana General Sales Tax Act, 1973 could be withheld merely because the order allowing the dealer's appeal had been referred for revision.

Analysis: The statutory scheme of refund obliges the Assessing Authority to refund tax, penalty, or interest paid in excess, subject to adjustment of any outstanding dues. Refund can be withheld only in the circumstances contemplated by the withholding provision, namely where the order giving rise to refund is under appeal or other pending proceedings and the competent authority forms the opinion that grant of refund is likely to adversely affect recovery. A mere reference for revision, without an order passed under the withholding provision, does not by itself authorize retention of the amount.

Conclusion: The withholding of refund was unjustified and not in accordance with the Act.

Issue (ii): Whether the dealer was entitled to refund with interest.

Analysis: Once the refund was found to be due, the statutory refund mechanism and the delay in returning the deposited amount justified grant of interest. The relief was also made subject to adjustment against any other outstanding demand within the permitted time.

Conclusion: The dealer was entitled to refund of the penalty amount with interest at 12% per annum.

Final Conclusion: The petition succeeded and the respondents were directed to release the refundable penalty amount with statutory interest, subject to permissible adjustment against outstanding dues.

Ratio Decidendi: Refund of tax or penalty can be withheld only in the manner and on the grounds specifically authorized by the statute, and a mere reference for revision does not ipso facto empower the authority to withhold refund.

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