Entry tax refund follows when exemption conditions are met and the collected levy is not sustainable, with interest payable.

Entry tax collected on aluminium ingots was treated as refundable where the industrial unit fell within the grampanchayat-based exemption under Rule 3(4) of the Orissa Entry Tax Rules, 1999 and the prescribed undertaking under the departmental circular had been furnished and accepted. On that basis, the levy was considered unsustainable, and the State was directed to refund the collected tax with statutory interest, with additional simple interest payable if refund was delayed beyond the fixed period.

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Issues: Whether the petitioner was entitled to refund of entry tax collected on purchase of aluminium ingots in view of the exemption under the entry tax framework and the undertaking furnished under the departmental circular.

Analysis: The petitioner's assertion that its industrial unit was situated in a grampanchayat area and therefore fell within the exemption under Rule 3(4) of the Orissa Entry Tax Rules, 1999 remained uncontroverted by the State. The materials also showed that the petitioner had furnished the prescribed undertaking pursuant to the departmental circular, and NALCO accepted that undertaking and deposited the collected tax with the State. In these circumstances, the collection of entry tax from the petitioner was treated as not sustainable, and the proper course was refund by the State Government together with statutory interest. The order further provided for additional simple interest if refund was delayed beyond the stipulated time.

Conclusion: The petitioner was held entitled to refund of the entry tax collected, along with interest in accordance with the Act and Rules, and additional simple interest for any delay beyond the period fixed in the order.

Ratio Decidendi: Where the statutory exemption conditions are satisfied and the levy collected from the purchasing dealer is not disputed on the record, the amount collected as entry tax is refundable by the State with applicable interest.

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