Refund bar under settlement scheme does not cover money paid under interim court direction; excess deposit must be returned.

Money deposited under an interim court direction in proceedings under the Kar Vivad Samadhan Scheme was not covered by the refund bar in Section 93 of the Finance (No.2) Act, 1998, because that restriction applies only to amounts paid pursuant to a declaration under Section 88. When the final order reduced the liability and the revised demand was implemented, the excess amount had to be refunded. The refusal to return the excess deposit was therefore unsustainable, although the claim for interest was rejected.

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Issues: Whether the amount paid pursuant to an interim court direction under the Kar Vivad Samadhan Scheme could be refunded as excess payment after the final determination, notwithstanding the bar on refund under Section 93 of the Finance (No.2) Act, 1998.

Analysis: The petitioner had paid the amount not in pursuance of the declaration under Section 88 of the Finance (No.2) Act, 1998, but in compliance with an interim order passed in the earlier writ proceedings. The later final order under the Scheme resulted in a reduced liability, and the consequential demand was implemented accordingly. The statutory prohibition in Section 93 applies to amounts paid pursuant to the declaration under Section 88, but it does not control amounts deposited under an interim judicial direction, which remain subject to the final outcome of the proceedings. On the facts, the excess payment represented the difference between the interim deposit and the amount actually payable under the revised demand.

Conclusion: The petitioner was entitled to refund of the excess amount of Rs. 76,292/-, and the refusal to grant refund was unsustainable. The claim for interest was, however, rejected.

Final Conclusion: The writ petition succeeded to the extent of refund of the excess sum paid under the interim order, but no interest was granted.

Ratio Decidendi: Money deposited pursuant to an interim court order is not hit by the statutory bar on refund applicable to amounts paid under a settlement declaration, and any excess over the final liability must be returned.

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