Court-directed tax deposit treated as deposit, not tax payment, securing refund interest and future liability adjustment.

An amount remitted under an interim court order was treated as a court-directed deposit, not as payment of tax dues under the Kerala General Sales Tax Act, 1963. On that basis, the statutory refund mechanism for tax payments was held inapplicable to the extent claimed by the Department. Once the remanded proceedings attained finality in favour of the applicant, the deposited amount had to be returned with interest. The applicant was therefore held entitled to the balance interest due, with adjustment permitted against future tax liabilities.

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Issues: Whether the amount remitted under the Court's interim order was to be treated as a statutory tax payment governed by the refund provisions of the Kerala General Sales Tax Act, 1963, or as a court-directed deposit carrying entitlement to interest till refund.

Analysis: The amount was directed by the Court to be treated as a deposit and not as payment of tax dues. That character was reiterated in the final order, and the deposit remained with the Department only until final disposal of the remanded proceedings. Since the amount was not paid towards tax liability as such, the statutory refund mechanism under the Kerala General Sales Tax Act, 1963 was held inapplicable to the extent urged by the Department. The Court accepted that, after the remanded proceedings attained finality in favour of the applicant, the deposited amount had to be returned with interest.

Conclusion: The application was allowed, and the applicant was held entitled to the balance interest due, with adjustment permitted against future tax liabilities.

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