Tribunal lacks authority to grant interest on delayed payments

The appeal for interest on delayed payment of interest was dismissed by the judge. The judge emphasized that the Tribunal lacks the authority to grant such interest in the absence of a specific provision in the law, citing a previous decision. The judge highlighted the importance of adhering to statutory provisions and concluded that the Tribunal cannot exceed its prescribed powers, ultimately leading to the dismissal of the appeal.

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Issues:
Interest on delayed payment of interest in the case of delayed sanction of refund.

Analysis:
The appellant, M/s Finolex Cables Ltd., sought interest on delayed payment of interest due to a delay in the sanction of a refund. The appellant's counsel argued citing the decision of the Hon'ble Supreme Court and the Hon'ble High Court of Gujarat in support of granting interest on delayed payment of interest. The appellant also relied on previous Tribunal decisions in similar cases. The Assistant Commissioner, representing the respondent, relied on different orders, including a decision of the Larger Bench where it was held that interest on interest cannot be sanctioned. The respondent also cited a Supreme Court decision to emphasize that High Courts cannot direct authorities to act contrary to the law.

Upon reviewing the submissions, the judge noted the conflicting decisions of different Tribunals regarding the allowance of interest on delayed payment of interest. The judge highlighted that the decision of the Hon'ble High Court in the Sandvik Asia Ltd. case, which had been overturned by the Supreme Court, established that assessees are entitled to interest on delayed payment of interest. The judge also referenced the decision of the Hon'ble High Court of Gujarat in the Shri Jagdamba Polymers Ltd. case, which supported the payment of interest on delayed payment of interest.

The judge emphasized that the Tribunal does not have the authority to exceed the scope of the Act and cannot grant interest on delayed payment of interest in the absence of a specific provision in the law. Referring to the Larger Bench's decision in the Sun Pharmaceuticals case, it was concluded that the Tribunal lacks the power to award such interest to any claimant. The judge reiterated that the Tribunal must adhere to the provisions of the Act and cannot go beyond its prescribed powers. Consequently, the appeal for interest on delayed payment of interest was dismissed, as there was no provision in the Act to allow for such interest.

In conclusion, the judgment highlighted the limitations of the Tribunal's authority in granting interest on delayed payment of interest and underscored the importance of adhering to the statutory provisions within the legal framework.

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