Interest on tax refund directed from date of earlier appeal decision until actual payment under delayed refund provisions.

Interest on a sanctioned tax refund was payable from the date the refund became due following the earlier tax appeal decision, applying the statutory framework on delayed refunds under Section 54 of the Gujarat Sales Tax Act, 1969. The High Court did not examine the refund entitlement dispute in detail and proceeded on the basis that refund had already been allowed. It directed payment of interest on the refunded amount at 9% per annum from 16 November 2016 until actual payment.

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Issues: (i) Whether interest was payable on the refunded amount of tax, and from what date.

Analysis: The refund had already been sanctioned, leaving only the question of interest. The Court proceeded on the basis of the refund becoming due pursuant to the earlier tax appeal decision and referred to the statutory framework governing interest on delayed refunds under Section 54 of the Gujarat Sales Tax Act, 1969. Without entering into any controversy on the applicability of Section 54 or the entitlement dispute in detail, the Court directed payment of interest on the refunded amount from the date of the earlier tax appeal decision, at a rate of 9% per annum until actual payment.

Conclusion: Interest on the refunded amount was held payable in favour of the assessee from 16 November 2016 till the date of actual payment at 9% per annum.

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