Refund interest on investigation deposit denied where later pre-deposit regime was held inapplicable retrospectively.

Interest on a deposit made during investigation before the Finance Act, 2014 amendments was held not payable because the later pre-deposit regime and the related refund-interest circular applied only to the amended statutory framework. A voluntary deposit made in 2007 did not fall within that regime, and the amended provision could not be applied retrospectively. On that basis, the assessee was denied interest on the deposited amount, and the Revenue's challenge to the grant of interest succeeded.

---

---

Issues: Whether interest was payable on the amount deposited during investigation prior to the Finance Act, 2014 amendments.

Analysis: The amount was voluntarily deposited during investigation in 2007, whereas the entitlement to interest relied upon by the assessee flowed from the amended pre-deposit regime introduced by the Finance Act, 2014. The circular issued in that context was held to be linked to the amended provisions governing mandatory pre-deposit and refund interest. Since the deposit in question was made long before that regime came into force, the amended provision could not be applied to the earlier deposit.

Conclusion: The assessee was not entitled to interest on the amount deposited during investigation, and the Revenue's challenge to the grant of interest succeeded.

Ratio Decidendi: Interest on refund is available only where the deposit falls within the statutory pre-deposit framework introduced by the amended provisions, and that regime does not apply retrospectively to deposits made earlier during investigation.

---