Statutory interest on delayed tax refund remains payable after the verification period expires despite bona fide scrutiny.

Interest under Section 29(2) of the U.P. Trade Tax Act becomes payable where a refund is not released within the prescribed 90-day verification period, even if the authorities conduct bona fide verification. The refund amount had already been found payable and returned, but the interest component was withheld. Applying the earlier court view that verification does not displace statutory interest liability after expiry of the statutory period, the refusal to pay interest was unsustainable and the petitioner was entitled to interest on the delayed refund.

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Issues: Whether the petitioner was entitled to interest under Section 29(2) of the U.P. Trade Tax Act on refund amounts retained beyond the statutory period.

Analysis: Section 29 of the U.P. Trade Tax Act allows the authorities a period of 90 days to verify a refund claim, and interest becomes payable if the refund is not made within that period. The amount in question had already been found refundable and was subsequently returned, but the interest component was withheld. A prior decision of the Court had held that bona fide verification does not absolve the authorities from liability to pay statutory interest once the prescribed period expires.

Conclusion: The petitioner was entitled to interest on the delayed refund under Section 29(2) of the U.P. Trade Tax Act, and the refusal to pay interest was unsustainable.

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