Refund interest on appellate enhancement upheld, while the question of interest on interest was left open for rectification.

Interest is payable on a refund that becomes due by virtue of an appellate order, and the refund interest must be recalculated in line with the appellate determination. The High Court upheld the Tribunal's view that refund interest is not confined to amounts arising only from an assessment order, but extends to enhanced refund granted on appeal. The separate question whether earlier interest itself should bear further interest was not finally decided; the Court left that issue open and permitted the State to seek clarification or rectification before the Tribunal under Section 79(2) of the VAT Act.

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Outcome: The tax appeal was disposed of with an observation that the Government may approach the Tribunal for clarification or rectification under Section 79(2) of the Gujarat Value Added Tax Act, 2003.

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