Interest on refund cannot be denied after revision is set aside; full interest payable subject to adjustment of prior payment.

Where a revisional order had been set aside and the first appellate order restored, the department could not deny interest on the refundable amount by relying on the earlier set-aside revision or on the pendency of intervening proceedings. The court held that the petitioner's entitlement to interest had already been recognised in prior directions and in the department's own earlier communication, so no basis remained to restrict interest for the disputed period. The petitioner was therefore entitled to the full interest claimed, subject to adjustment of any amount already paid, and the balance was directed to be paid.

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Issues: Whether the petitioner was entitled to interest on the refund amount for the period during which the department relied on the revised assessment and the pending proceedings, and whether the revised computation restricting interest was sustainable.

Analysis: The earlier revisional order had been set aside and the first appellate order restored. Once that position was reached, the department could not deny interest by relying on the set-aside revision order or by contending that no interest accrued during the intervening period. The prior directions had already recognised the petitioner's entitlement to interest on the refundable amount, and the department's own earlier communication had proceeded on that basis. The objection that interest was not payable till the earlier proceedings were concluded was therefore rejected.

Conclusion: The petitioner was entitled to the full interest claimed, subject to adjustment of any amount already paid towards interest, and the respondents were directed to pay the balance amount.

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