Interest on excise-duty refunds is not automatic in writ jurisdiction absent statutory provision or special equitable facts.

Interest on excise-duty refund was not payable where the statute and rules governing the refund scheme contained no provision for interest. The High Court held that excise authorities had no inherent power to award interest contrary to the enactment, and that writ jurisdiction could grant such relief only on special equitable facts. On the facts, there was no unreasonable delay after the appellate proceedings, no pleaded or proved circumstance creating a clear equity, and no actual loss shown to justify compensation by way of interest. The writ petition therefore failed, and the claim for interest was rejected.

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Issues: Whether interest could be awarded on excise duty refunded to the assessee by exercise of writ jurisdiction under Article 226 of the Constitution of India.

Analysis: The refund claim arose under the statutory scheme governing excise duty, and the relevant enactment and rules did not provide for payment of interest on refund. The Court held that the omission to provide for interest was deliberate, and that the excise authorities, being bound by the statute and the rules, had no inherent power to award interest. The Court further held that, even assuming that writ jurisdiction could in an appropriate case be used to grant interest on equitable grounds, such relief was not automatic and depended on the facts establishing special equity. On the facts, there was no unreasonable delay in effecting refund after the appellate proceedings, no pleaded or proved circumstance justifying equitable relief, and the petitioner had not shown any actual loss warranting compensation by way of interest.

Conclusion: Interest on the refunded excise duty was not payable, and the claim for such relief failed.

Final Conclusion: The writ petition was dismissed because no equitable or legal basis was made out for awarding interest on the refunded duty.

Ratio Decidendi: In the absence of a statutory provision for interest on excise-duty refund, interest is not to be awarded as a matter of course under writ jurisdiction and can be granted only where special facts create a clear equitable entitlement.

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