Refund of excess tax and statutory interest apply when reassessment shows no liability and revenue retains the amount.

Amounts paid as tax and later identified on reassessment as excess were refundable under the Bengal Finance (Sales Tax) Act, 1941, because section 12(1) and rule 55(1A) required refund or adjustment once no subsisting arrears were shown for other periods. The excess retention could not be justified merely because the sums had originally been deposited as tax. Interest was also payable on the retained excess amounts, with the period running from the reassessment orders that first determined the absence of liability and the rate and mode governed by section 10B. The assessee was therefore entitled to refund with statutory interest.

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Issues: (i) whether amounts deposited as tax, which were later found on reassessment to be in excess of the liability, were refundable under the Bengal Finance (Sales Tax) Act, 1941; and (ii) whether interest was payable on the retained excess amounts.

Issue (i): whether amounts deposited as tax, which were later found on reassessment to be in excess of the liability, were refundable under the Bengal Finance (Sales Tax) Act, 1941.

Analysis: The amounts had been deposited as tax and, after reassessment pursuant to appellate directions, were expressly declared by the assessing authority to be tax paid in excess. Once the excess payment was so identified, the statutory machinery under section 12(1) and rule 55(1A) required refund or adjustment in accordance with the prescribed procedure. In the absence of any subsisting arrears shown for other periods, there was no basis to withhold the excess amounts or to deny the statutory refund obligation.

Conclusion: The excess amounts were refundable to the applicants.

Issue (ii): whether interest was payable on the retained excess amounts.

Analysis: The excess payment arose in the course of reassessment made pursuant to the appellate authority's order, and the retention of the sums by the revenue after the amounts had been declared excess attracted the interest provision. The period for interest was to be computed from the reassessment orders that first determined the absence of tax liability, and the rate and manner of payment were governed by section 10B.

Conclusion: Interest was payable on the retained excess amounts in accordance with section 10B.

Final Conclusion: The applications succeeded, and the assessee was entitled to refund of the excess tax together with statutory interest.

Ratio Decidendi: Amounts collected and retained as tax, but subsequently found on reassessment to be in excess of liability, must be refunded under the refund provisions, and statutory interest is payable for unlawful retention where the governing provision so provides.

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