Statutory interest on sales tax refunds remains payable even when refund arises from a second appeal order.

Statutory interest on sales tax refund under section 54(1)(aa) remained payable even when the refund became due only on a second appeal order and not directly from the assessment order. Earlier Tribunal authority denying such interest was displaced by later Tribunal reasoning, which was approved in binding Division Bench precedent and rendered the contrary view no longer good law. The entitlement was therefore answered in favour of the assessee and against the revenue.

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Issues: Whether interest under section 54(1)(aa) of the Gujarat Sales Tax Act, 1969 was admissible when the refund became due pursuant to an order in second appeal and not directly as a result of the assessment order under section 41 of the Act.

Analysis: The reference was made under section 69 of the Gujarat Sales Tax Act, 1969 on the question of entitlement to interest on refund. Earlier Tribunal authority had taken the view that such interest was not admissible where the refund arose from an order in second appeal. A subsequent Tribunal decision in Saurashtra Chemicals Limited took the contrary view and held that the dealer would still be entitled to interest under section 54(1)(aa). That view had since been approved by the Division Bench in Doshi Printing Press, and the earlier view in Gayatri Tiles was no longer good law.

Conclusion: Interest under section 54(1)(aa) was admissible to the assessee even though the refund became due pursuant to the second appeal order, and the issue was answered in favour of the assessee and against the revenue.

Ratio Decidendi: Entitlement to statutory interest on refund does not depend on the refund arising directly from the assessment order if later binding precedent holds that refund granted in second appeal also attracts interest under the governing provision.

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