Refund cannot be withheld pending appeal when the appellate order remains unstayed, with interest payable for delay.

Where an appellate authority has already directed a refund, the subordinate revenue authority cannot withhold payment merely because an appeal has been filed, unless the order is stayed by a higher forum. Delayed-refund interest operates as a consequence of non-payment and does not justify postponing compliance with an operative refund direction. The text also reflects the application of judicial discipline and a departmental circular requiring refund to be released unless a stay is obtained. Immediate refund with interest admissible in law follows from the subsisting appellate order.

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Issues: Whether the Revenue could withhold refund already directed by the appellate authority merely because it had filed an appeal and whether the assessee was entitled to immediate refund with admissible interest.

Analysis: The refund claim had been adjudicated in favour of the assessee by the appellate authority after factual verification, and that order remained operative as no stay had been granted by any higher forum. The Court held that once competent authority had directed refund, the subordinate authority could not retain the amount on the premise that the Revenue might be entitled to interest under the statutory interest provision. The provision for interest on delayed refund was held to operate as a consequence of delay, not as a justification to postpone payment. The Court also relied on the principle of judicial discipline and the applicable departmental circular that refund should not be withheld merely because an appeal is filed unless a stay order is obtained.

Conclusion: The Revenue was not entitled to withhold the refund, and the assessee was entitled to immediate refund with interest admissible in law.

Final Conclusion: The writ petition succeeded, and the refund direction issued by the appellate authority was required to be implemented forthwith.

Ratio Decidendi: An operative appellate order granting refund must be complied with unless stayed, and the statutory provision for interest on delayed refund cannot be used to justify withholding a lawful refund.

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