Delayed tax refund interest under U.P. Trade Tax Act remains payable despite departmental verification delays.

Interest on delayed refund of excess tax deducted at source was held payable under Section 29(2) of the U.P. Trade Tax Act because the department's internal verification of the TDS certificate did not extinguish the statutory liability. The Court applied the principle that an assessee should not suffer for delay not attributable to it, and treated the delay in verification as no defence to interest liability. It therefore held that simple interest at 18% per annum was payable from the date of the assessment order until refund, and directed the department to compute and pay the interest.

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Issues: Whether the assessee was entitled to interest at 18% per annum on the delayed refund of excess tax deducted at source under Section 29(2) of the U.P. Trade Tax Act.

Analysis: The excess amount deducted at source was ultimately found to be correct on verification, and the Court held that delay in verifying the TDS certificate could not defeat the statutory liability to pay interest. Section 29(2) provides for simple interest at 18% per annum where refundable tax is not paid within the prescribed period, and the assessee cannot be made to suffer for no fault of its own. Applying the earlier Division Bench principle, the Court held that internal verification by the department does not absolve it from paying statutory interest on delayed refund.

Conclusion: The assessee was entitled to interest at 18% per annum from the date of the assessment order till the date of refund, and the department was directed to compute and pay the interest.

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