Delayed refund interest under Bombay Sales Tax law accrues despite revisional proceedings when the refund is ultimately paid.

Interest on delayed refund under the Bombay Sales Tax Act arose where a refundable amount was not paid within ninety days of the refund order. Section 44B, which allows withholding of refund during pending proceedings, did not justify denial of interest merely because revisional proceedings had been initiated, since the scheme still contemplated interest where the refund was ultimately found due. On a harmonious reading of sections 44A and 44B, once the assessment order was restored and the refund was actually paid, interest accrued from the expiry of ninety days after the relevant refund order until actual payment.

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Issues: Whether the petitioner was entitled to interest on delayed refund under section 44A of the Bombay Sales Tax Act, 1959, and whether section 44B could be invoked to deny such interest during the period when the refund was ultimately restored.

Analysis: The entitlement to interest on refund arose under section 44A where a refundable amount was not paid within ninety days of the refund order. Section 44B permitted withholding of refund in pending proceedings only with the prescribed safeguard, and even then it provided for interest when the refund was ultimately found due. Reading both provisions harmoniously, the statutory scheme did not justify denial of interest merely because revisional proceedings had once been initiated. Since the assessment order was restored and the refund was ultimately paid, the assessee became entitled to interest from the expiry of ninety days from the relevant refund order until actual payment.

Conclusion: The claim for interest on delayed refund was allowed, and the petitioner was held entitled to simple interest at the prescribed rate on the refunded amount for the relevant period.

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