Statutory refund interest under sales tax law follows after ninety days without a fresh refund application.

Where a refund becomes payable under an order modifying or reversing tax, penalty or interest liabilities, section 12(3) of the Punjab General Sales Tax Act, 1948 makes simple interest payable if the amount is not refunded within ninety days. A separate refund application under section 12(1) is not required before claiming that interest. The Court rejected the argument that the dealer had to first seek refund under section 12(1), and found no basis to exclude the interest period on the facts. The refund amounts were therefore held to carry statutory interest for the delayed period.

---

---

Issues: Whether, on refund becoming payable pursuant to modification or reversal of tax, penalty or interest orders under section 12(3) of the Punjab General Sales Tax Act, 1948, the dealer is entitled to simple interest when the refund is released beyond ninety days, and whether a separate application for refund under section 12(1) is necessary before interest can be claimed.

Analysis: Section 12(1) governs refund claims made by a registered dealer in respect of amounts paid in excess or in specified cases of declared goods, and it contemplates a claim made by the dealer within the prescribed limitation. Section 12(3), by contrast, operates where an amount is required to be refunded by virtue of an order passed under the Act and is not refunded within ninety days of that order. In such a case, interest becomes payable automatically, and the provision does not require a fresh refund application by the dealer. The Court held that mere inaction by the dealer in chasing the authorities does not amount to a delay attributable to the dealer, and no valid reason beyond the control of the Assessing Authority was shown to exclude the interest period.

Conclusion: The dealer is entitled to simple interest under section 12(3) for the delayed period on the refunded amounts, and the plea that a prior refund application under section 12(1) was necessary was rejected.

Final Conclusion: The writ petitions succeeded, and the refund amounts were held to carry statutory interest for the delayed period in accordance with section 12(3).

Ratio Decidendi: Where a refund becomes payable by reason of an order under the Act and is not made within ninety days, interest follows under section 12(3) without the need for a separate refund application under section 12(1), unless the delay is shown to be attributable to the dealer or otherwise excluded by law.

---