Statutory interest on tax refunds cannot be denied by reopening an already granted refund order without review power or notice.

Statutory interest on a tax refund could not be denied by the refunding authority by reopening its own refund order on the basis of unjust enrichment. Because the refund had already been granted under appellate and tribunal orders, the claim for interest followed from the statutory entitlement under Section 54(1) of the Sales Tax Act. In the absence of review power and without notice, the authority could not collaterally question whether the refund itself ought to have been granted. The refusal order was quashed and payment of the balance interest directed.

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Issues: Whether the petitioners were entitled to interest on refund for the entire period from the date of deposit of tax till actual payment, and whether the refunding authority could deny such interest by reopening the basis of its own refund order on the ground of unjust enrichment.

Analysis: The refund had already been granted pursuant to the orders of the appellate authority and the Tribunal, and the claim for interest flowed from the statutory right under Section 54(1) of the Sales Tax Act. The authority could not, without notice and without any power of review, ignore its own refund order and repudiate the liability to pay interest by questioning whether the refund itself ought to have been granted. The reliance on unjust enrichment and the assumption that no refund was payable in the first place was held to be impermissible in this collateral manner.

Conclusion: The petitioners were held entitled to interest on the refund for the entire relevant period, after adjusting the interest already paid, and the refusal order was set aside.

Final Conclusion: The impugned order was quashed and the competent authority was directed to compute and pay the balance statutory interest on the refunded tax.

Ratio Decidendi: An authority that has granted refund under the statute cannot, in the absence of review power and without notice, deny statutory interest on that refund by subsequently challenging the legality of its own refund order.

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