Mandatory interest on delayed tax refund applies from expiry of the statutory period, despite later adjustment claims.

Delayed refund of tax under the Andhra Pradesh General Sales Tax Act attracted mandatory simple interest once the refund was not granted within six months of the refund claim or appellate order. The attempt to defer interest by relying on alleged adjustments against Entry Tax Act arrears was rejected because those liabilities were distinct and could not defeat the statutory obligation. Interest was therefore payable from the expiry of the six-month period after the refund claim until actual refund, and the contrary contention was disallowed.

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Issues: Whether the assessee was entitled to interest under section 33F on the delayed refund of tax and, if so, from what date the interest period had to be computed.

Analysis: Section 33F of the Andhra Pradesh General Sales Tax Act, 1957 mandates payment of simple interest when a refund due pursuant to an appellate order is not granted within six months from the date of the relevant refund claim or order. The refund claim was made on 27 January 2004, and six months expired on 26 July 2004. The attempt to postpone the commencement of interest by referring to alleged adjustments against arrears under the Entry Tax Act was rejected, since those liabilities were distinct and the refund was ultimately granted only on 8 November 2011. The statutory obligation to pay interest could not be avoided by post hoc assertions of adjustment.

Conclusion: The assessee was entitled to interest on the refunded amount for the period from 26 July 2004 to 15 November 2011, and the contention that interest ran only from a later date was rejected.

Final Conclusion: The delayed refund attracted mandatory statutory interest, and the respondents were directed to compute and pay the interest with costs.

Ratio Decidendi: Where a refund due under the appellate regime is not granted within the statutory six-month period, interest becomes mandatory from the expiry of that period until actual refund, and later claims of adjustment against unrelated arrears do not defeat that liability.

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