Statutory refund interest under trade tax law accrues after the grace period, and costs may follow non-compliance.

Section 29 of the U.P. Trade Tax Act provides mandatory interest where a refund is not granted within three months of receipt of the relevant order. The article notes that, because the refund was not made within that statutory period, interest accrued from the date the appellate order was received until actual payment, and the assessee was entitled to interest at 18% per annum on the refund amount for that period. It also states that failure to discharge the statutory refund obligation justified an award of costs against the respondents, payable to the assessee.

---

---

Issues: (i) Whether the assessee was entitled to statutory interest on the refund amount under section 29 of the U. P. Trade Tax Act. (ii) Whether costs were payable for failure to discharge the statutory refund obligation.

Issue (i): Entitlement to interest on refund

Analysis: Section 29 of the U. P. Trade Tax Act makes payment of interest mandatory where a refund is not granted within three months from the date of receipt of the relevant order. The refund amount had been received during the pendency of the writ petition, leaving only the claim for interest in dispute. Since the appellate order was received on 20 September 2007 and the refund was not made within the statutory grace period, the liability to pay interest arose from that date until actual payment.

Conclusion: The assessee was entitled to interest at 18% per annum on the refund amount for the relevant period.

Issue (ii): Liability to pay costs for failure to make timely refund

Analysis: The respondents did not discharge the statutory obligation to make the refund with interest within the prescribed time. In view of that default, the Court considered an award of costs justified.

Conclusion: Costs were imposed on the respondents and were payable to the assessee.

Final Conclusion: The writ petition succeeded, with the assessee obtaining refund interest and costs for the respondents' failure to comply with the statutory refund requirement.

Ratio Decidendi: Where a statutory refund is not made within the prescribed grace period after receipt of the relevant order, interest becomes payable from the date of receipt of that order until actual payment, and costs may also be awarded for non-compliance.

---