Statutory refund claims cannot be withheld without express authority, and delayed payment may trigger interest from the application date.

Refund claims under the sales tax law cannot be rejected after reassessment orders have attained finality unless express statutory authority permits withholding. The Court noted that no order was passed under the withholding provision, and the dealer was not heard or subjected to the enquiry required by the rules, so the rejection lacked legal basis and was liable to be quashed. Where a refund application is wrongly kept pending beyond the prescribed period, statutory interest follows from the date of filing of the application until payment, because unexplained delay amounts to unlawful retention of the dealer's money.

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Issues: (i) Whether the Sales Tax Officer was justified in rejecting the refund applications after the reassessment orders had attained finality. (ii) Whether the dealer was entitled to interest on the refund amount from the date of filing of the refund applications.

Issue (i): Whether the Sales Tax Officer was justified in rejecting the refund applications after the reassessment orders had attained finality.

Analysis: Refund under section 14 of the Orissa Sales Tax Act, 1947 arises when excess tax or similar dues have been paid pursuant to an assessment, penalty, appeal, revision, or reference order. The refund applications were filed within limitation after the reassessment orders granting refund, yet they were kept pending for more than four years. No order was passed under section 14D of the Orissa Sales Tax Act, 1947 to withhold refund, though that provision alone authorises temporary withholding where the refund order is under appeal or further proceeding. The rejection was also made without hearing the dealer and without the enquiry contemplated by rule 39(2) of the Orissa Sales Tax Rules, 1947. The rejection, made after finality of the assessment proceedings, was unsupported by law.

Conclusion: The rejection of the refund applications was not justified and was liable to be quashed.

Issue (ii): Whether the dealer was entitled to interest on the refund amount from the date of filing of the refund applications.

Analysis: Interest was held to follow where the refund claim was wrongly kept pending beyond the prescribed period without lawful authority. The Court applied section 14C of the Orissa Sales Tax Act, 1947 and treated the prolonged inaction on the refund applications as unjustified retention of money due to the dealer. The delay could not be used to defeat the statutory liability to pay interest from the date of the refund application until payment.

Conclusion: The dealer was entitled to interest on the refund amount from the date of filing of the refund applications till payment.

Final Conclusion: The refund rejection orders were set aside, and the dealer was granted refund with statutory interest, resulting in complete relief in its favour.

Ratio Decidendi: A refund claim filed under the sales tax law cannot be withheld or rejected after the prescribed period except under express statutory authority, and if refund is wrongfully delayed without lawful basis, interest becomes payable from the date of the refund application until actual payment.

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