Interest on refunded entry tax deposits depends on statutory entitlement; voluntary payment without fiduciary relationship defeats interest claims.

Interest on a refunded entry tax deposit is payable in tax matters only when authorised by the statute, an agreement, or another recognised rule of law. The Interest Act, 1978 did not assist because the claim was not based on any existing legal entitlement to interest under the entry tax framework, and section 4(2)(b) was inapplicable because no fiduciary relationship arose from a voluntary remittance made to secure registration. Where the taxpayer itself requested the tax calculation and paid the amount without a prior departmental demand, the deposit is voluntary and interest cannot be claimed on equitable grounds.

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Issues: Whether interest was payable on the refunded entry tax amount under the Interest Act, 1978, when the amount had been deposited voluntarily and no fiduciary relationship existed between the parties.

Analysis: Interest can be awarded in tax matters only where it is authorised by the relevant enactment, agreement, or another recognised rule of law. Section 4(1) of the Interest Act, 1978 was inapplicable because the claim did not arise from any existing legal entitlement to interest under the entry tax law. Section 4(2)(b) also did not assist the petitioner, because a fiduciary relationship requires a relationship of trust, confidence, dominance, or agency-like responsibility. The correspondence showed that the petitioner itself requested calculation of entry tax and remitted the amount to obtain registration, without any prior demand by the department. The deposit was therefore voluntary, and no fiduciary relationship arose. Interest could not be granted merely on equitable grounds.

Conclusion: The petitioner was not entitled to interest on the refunded amount.

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