Interest on delayed refund runs from three months after the refund application until sanction, not from the Tribunal order.

Interest on a delayed refund becomes payable after expiry of three months from receipt of the refund application and continues until the refund is actually sanctioned. The contrary view that interest could run only from the date of the Tribunal's refund order was held inconsistent with the law declared by the Supreme Court, so the assessee was entitled to interest from the end of the statutory three-month period rather than from the later sanctioning order.

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Issues: Whether interest on the refund was payable from the date of expiry of three months from receipt of the refund application, or only from the date of the Tribunal's order sanctioning refund.

Analysis: The Tribunal followed the settled position that interest becomes payable on delayed refund after the expiry of three months from the date of receipt of the refund application and continues till the date the refund is sanctioned. The contrary view adopted in the impugned order was held to be inconsistent with the law declared by the Supreme Court.

Conclusion: Interest was held payable from three months after the refund application and not merely from the date of the Tribunal's order, in favour of the assessee.

Ratio Decidendi: Where refund is delayed, interest runs after the statutory period from the date of receipt of the refund application until actual sanction of refund.

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