Interest on provisional VAT refund upheld where the refund arose from an order outside the assessment-based provision.

Section 38(2) of the Gujarat VAT Act was construed broadly to cover a provisional refund granted under a provisional assessment order, because the provision applies to refunds payable under orders other than those covered by Section 38(1) or by a court order. On that reading, the dealer was entitled to simple interest at 6% per annum from the relevant date until payment. The Tribunal's interpretation allowing interest on the provisional refund was found correct, and the appeal failed.

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Issues: Whether a dealer is entitled to interest under Section 38(2) of the Gujarat Value Added Tax Act, 2003 on a provisional refund granted pursuant to a provisional assessment order.

Analysis: Section 38(1) governs interest on refund arising from an assessment under Section 34, while Section 38(2) applies to refunds payable under orders other than those covered by sub-section (1) or under orders of a Court. The expression "any order other than referred to under sub-section (1)" was read broadly to include a provisional assessment and the refund granted on that basis. On the plain language of the provision, the dealer was entitled to simple interest at 6% per annum on the provisional refund from the relevant date until payment, and the Court found no error in the Tribunal's interpretation.

Conclusion: The dealer is entitled to interest under Section 38(2) on the provisional refund.

Final Conclusion: The appeal failed and the Tribunal's view granting interest on the provisional refund was affirmed.

Ratio Decidendi: Where the statutory language expressly grants interest on refund arising from an order other than an assessment order covered by the specific sub-section, a provisional refund granted under such an order carries interest at the prescribed rate.

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