Delayed refund interest follows appellate relief where the assessment merges into the appellate determination.

Delayed refund under Section 54 of the Gujarat Sales Tax Act was held to attract statutory interest where appellate relief ultimately established the dealer's entitlement. The appellate order was treated as having merged with the assessment, so the refund claim was regarded as arising from the assessment order for interest purposes. Relying on earlier decisions, the Court reiterated that a dealer cannot be denied interest merely because the assessment was carried in appeal. Reference was also made to the comparable interest provision in the Gujarat Value Added Tax Act to support entitlement on delayed refund. Interest was awarded on the refund until actual payment.

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Issues: Whether the petitioner was entitled to interest on the delayed refund under Section 54 of the Gujarat Sales Tax Act, 1969, and whether the refund arising from the appellate order was covered by the principle of merger.

Analysis: The refund became payable only after the appellate relief, but the appellate order merely corrected the assessment and the assessment stood merged in the appellate determination. On that footing, the refund claim was treated as arising from the order of assessment for the purpose of Section 54. The Court followed its earlier decisions recognising that a dealer who is ultimately found entitled to refund cannot be denied statutory interest merely because the assessment was carried in appeal. Reference was also made to the comparable interest provision under Section 38 of the Gujarat Value Added Tax Act, 2003, which supports the entitlement to interest on delayed refund.

Conclusion: The petitioner was entitled to interest on the delayed refund at 6% per annum from 13.07.2009 until actual payment.

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