Sales tax refund interest depends on a valid application; defective claims do not trigger statutory interest.

Interest on sales tax refund under section 43 of the Bihar Finance Act, 1981 accrues only after a valid refund application is received and the refund is not made within six months. Rule 34 of the Bihar Sales Tax Rules, 1983 requires notice in Form XV and a refund claim in Form XX. Where the initial application was incomplete or defective and the refund was processed soon after a corrected application was filed, any delay was attributable to the absence of a proper claim rather than unjustified withholding by the authority. On that basis, interest was not payable on the refunded amount.

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Issues: Whether the petitioner was entitled to interest on the refund of sales tax under section 43 of the Bihar Finance Act, 1981 when the refund application was not promptly or properly made and the refund was granted soon after a complete application was received.

Analysis: Section 43 of the Bihar Finance Act, 1981 provides for interest only when refundable amounts are not refunded within six months from the date of receipt of an application by the dealer or person concerned. Rule 34 of the Bihar Sales Tax Rules, 1983 requires a notice in Form XV and a refund application in Form XX. On the facts found, the authority had issued the notice, the first application was incomplete and defective, and the refund was made shortly after receipt of the corrected application. In these circumstances, the delay, if any, was attributable to the absence of a proper application and the defects in the initial request rather than to any unjustified withholding by the authority.

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

Ratio Decidendi: Interest on refund becomes payable only when a valid refund application is received and the refund is not made within the statutory period; delay caused by failure to make a proper application does not attract interest.

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