Refund interest follows Supreme Court rule, running only three months after claim filing until payment.

Interest on refund was confined to the period beginning three months after filing the refund claim and continuing until payment, because a later Supreme Court ruling governed the entitlement. The Tribunal declined to follow an earlier coordinate decision that had allowed interest from the date of deposit during investigation, holding that the binding Supreme Court rule restricted the refund interest period. Interest was therefore not payable from the date of deposit; it was payable only from the expiry of three months after the refund application was filed, to the extent of the refund actually granted.

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Issues: Whether interest on the refunded amount was payable from the date of deposit during investigation till realization, or only after three months from the date of filing of the refund claim till realization.

Analysis: The Tribunal held that an earlier coordinate decision allowing interest from the date of deposit could not be followed because a later decision of the Supreme Court had laid down the applicable rule. In view of the binding nature of the Supreme Court ruling, the entitlement to interest on refund was restricted to the period commencing three months after the refund application was filed and continuing until payment of the refund.

Conclusion: Interest was not allowable from the date of deposit; it was allowable only after three months from the date of filing of the refund claim till realization, in favour of the assessee to that extent only.

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