Delayed tax refund carries statutory interest when departmental approval is pending and the refund remains unpaid beyond the prescribed period.

Refunds of excess tax, penalty or interest under the Haryana General Sales Tax Act must be made within the prescribed period, and delay attracts interest unless properly condoned. Rule 35(1)(b) requires refund following an appellate or revisional order within 90 days of the application; if not, interest is payable at the rate linked to section 25(5). The later departmental approval process under rule 36 does not suspend the statutory obligation once the refund amount has been determined, and internal formalities do not defeat the dealer's entitlement to interest on delayed refund.

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Issues: Entitlement to interest on delayed refund under the Haryana General Sales Tax Act, 1973 and the Haryana General Sales Tax Rules, 1975, despite the requirement of departmental approval for refunds exceeding the prescribed monetary limit.

Analysis: Section 43 of the Haryana General Sales Tax Act, 1973 obliges the revenue to refund tax, penalty or interest paid in excess, and subsection (2) entitles the dealer to interest on delayed refund on such terms as are prescribed. Rule 35(1)(b) of the Haryana General Sales Tax Rules, 1975 requires refund arising from an appellate or revisional order to be made within 90 days of the application, failing which interest becomes payable at the rate specified in section 25(5) of the Act unless delay is condoned. Section 25(5) adopts a graded rate of interest for default in payment of tax, which is applied by the refund rules on the principle of mutuality. The subsequent approval process under rule 36 did not justify withholding the refund beyond the prescribed period once the refund amount had been determined, and pendency of departmental formalities did not defeat the statutory entitlement to interest.

Conclusion: The assessee was entitled to interest on the delayed refund at 12% per annum for the first month of delay and 18% per annum for the subsequent period.

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