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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether interest was payable on the delayed refund of the penalty amount despite the absence of an express provision for interest in the refund rule.
Analysis: The penalty had been imposed under section 7(2) of the West Bengal Sales Tax Act, 1954 and later set aside in revision. Refund was then sought under rule 30(2) of the West Bengal Sales Tax Rules, 1954, which contemplated repayment within a prescribed time after modification or reduction. The retained amount was not refunded for a long period after the revisional relief, and no satisfactory explanation was offered for the delay. The Court treated the prolonged retention as attributable to the respondents' negligence and held that interest could be granted even though the rule did not expressly provide for it. The period between the revisional order and the dismissal of the review application was excluded because the review proceedings were pending during that interval.
Conclusion: Interest on the refunded penalty amount was held payable, limited to the period from the dismissal of the review application until actual refund, at 6% per annum, with a higher rate if payment was not made within the time granted.
Ratio Decidendi: Where refunded statutory money is wrongfully retained for an unreasonable period after the underlying demand has been set aside, interest may be awarded on equitable grounds notwithstanding the absence of an express interest provision.
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