Delayed tax refund carries statutory interest from expiry of the three-month period after the Tribunal's order.

Delayed refund of tax attracts statutory simple interest where the refund is not made within three months from the relevant refund order, including an order passed by the Tribunal and received by the competent authority. The liability to refund arose on the Tribunal's final order, not on the filing of a separate refund application, so rule-based arguments tying interest to that application were rejected. Because the refund vouchers were issued after expiry and were dishonoured, the refund was not effected within the statutory period. The assessee was therefore entitled to interest from the end of the three-month period until a valid refund voucher was delivered.

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Issues: Whether the petitioner was entitled to interest on the delayed refund of tax amount, and from what date such interest became payable.

Analysis: Section 29(1) of the U.P. Trade Tax Act, 1948 obliges the assessing authority to refund excess tax, fees or other dues, while section 29(2) grants simple interest at eighteen per cent per annum if the refund is not made within three months from the date of the refund order or, where the order is made by another competent authority or court, within three months from receipt of that order. The refund in this case arose from the Tribunal's final order, and the material on record did not show any justification for the long delay in giving effect to that order. The subsequent issuance of refund vouchers beyond their validity period and their dishonour by the bank showed that the refund was not made within the statutory time. The contention based on rule 90 of the U.P. Trade Tax Rules, that interest could arise only after an application for refund, was rejected because the liability to refund attached upon the final order itself, not on the date of the refund application.

Conclusion: The petitioner was entitled to statutory interest on the delayed refund, commencing after expiry of three months from the Tribunal's order and continuing until delivery of a valid refund voucher.

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