Deferment scheme refund and statutory interest follow where eligibility certificate relates back to the production commencement date.

Under the deferment scheme, eligibility certificate once issued was treated as relating back to the date industrial production commenced, so the benefit covered the entire eligible period rather than only the period after issuance. The assessee was therefore entitled to refund of sales tax already paid for the pre-certificate period within the seven-year entitlement, and the department was not entitled to retain tax collected during that intervening period. Statutory interest was also payable from the date the amount was wrongly retained until refund or adjustment, subject to adjustment of any outstanding dues before release of the balance.

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Issues: Whether the assessee was entitled to refund of sales tax paid for the period prior to issuance of the eligibility certificate under the deferment scheme, and whether statutory interest was payable on the refunded amount.

Analysis: The deferment scheme made the benefit available once the eligibility certificate was issued, but the certificate, when granted, related back to the date from which the industrial unit had commenced production and covered the entire eligible period. The assessee had been found entitled to deferment for the full seven-year period, and the tax already collected during the intervening period was therefore not required to be retained by the department. Since the amount had been wrongly retained after the date of the eligibility decision, interest was also payable from that date until refund or adjustment.

Conclusion: The assessee was entitled to refund of the tax already paid for the eligible period, together with statutory interest, and the department could adjust any outstanding dues before releasing the balance.

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