Statutory interest on delayed refund of appeal pre-deposit becomes payable after ninety days of the refund claim.

Statutory interest became payable on a refundable pre-deposit when the refund was not released within ninety days of the claim under Section 30(4) of the Delhi Sales Tax Act, 1975. The amount deposited as a condition for appeal was admitted to be refundable after the assessee succeeded, and the delay in processing the refund was held attributable to the revenue authorities. Objections based on alternate remedy and alleged inaction by the assessee were rejected, because the refund application had remained unprocessed for an unreasonable period. Interest was held payable from the ninetieth day after the refund application until actual payment.

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Issues: Whether the assessee was entitled to interest on the delayed refund of the amount deposited as a pre-condition for filing the appeal, under Section 30(4) of the Delhi Sales Tax Act, 1975.

Analysis: The amount of Rs.10,00,000/- stood admitted to be refundable after the assessee succeeded in appeal and made the refund application. Even on the respondents' own case that the amount was to be treated as tax, Section 30(4) of the Delhi Sales Tax Act, 1975 mandated simple interest where a refundable amount was not paid within ninety days of the claim. The plea of alternate remedy was rejected, as the assessee had already been driven to court because the refund claim had not been processed within a reasonable time. The plea of inaction by the assessee was also rejected because the delay was attributable principally to the respondents' failure to process the refund application.

Conclusion: The assessee was entitled to interest on the refunded sum from the ninetieth day after the refund application dated 18.05.2012 till the date of actual payment, and the claim was allowed.

Ratio Decidendi: Where a refundable amount is not paid within ninety days of the refund claim, statutory interest under Section 30(4) of the Delhi Sales Tax Act, 1975 becomes payable from the expiry of that period until refund is made.

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