Interest on delayed tax refund payable from reasonable time when statute is silent on refund delay and interest.

Where a tax refund is withheld and the statute does not fix a refund timeline or provide interest for delay, the refund must be made within a reasonable time, and retention of the amount beyond that period attracts compensation by way of interest under common-law principles. On the facts, the reasonable time was treated as 1 August 2001, and the applicable rate was adjusted to the prevailing reduced rate. Interest was therefore payable at 6% per annum from 1 August 2001 until the date of refund, and the amount of interest had to be paid to the petitioner.

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Issues: Whether interest was payable on a tax refund that had been withheld and later paid during the pendency of the writ petition, and if so, from what date and at what rate.

Analysis: The statute did not prescribe the time within which the refund had to be made or provide for interest on delay. In such a situation, refund of money found due on assessment was required within a reasonable time, and where the amount remained with the authority beyond that period, common-law principles entitled the person beneficially entitled to the money to compensation by way of interest. The reasonable time in the facts was treated as 1 August 2001, and regard was had to the reduced prevailing rate of interest.

Conclusion: Interest was payable at 6% per annum from 1 August 2001 until the date of refund, and the petitioner was entitled to payment of the interest amount.

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