Supreme Court rules against interest on excess duty refund in absence of statutory basis.

The Supreme Court set aside the Bombay High Court's decision granting interest on excess duty refund to a pharmaceutical company. The Court noted the absence of a statutory basis for the interest claim under Article 226 of the Constitution. As there was no legal obligation for the revenue to refund a specific amount by a certain date, the High Court's writ of mandamus was deemed unsupported. The revenue's appeal was allowed, and the respondent's Writ Petition was dismissed.

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Issues involved: Claim for interest on excess duty refund u/s Article 226 of the Constitution without statutory basis.

Summary:
The respondent-Company, involved in manufacturing medicines, had a dispute regarding the excise duty rate payable on its products, which was resolved in its favor by the Customs, Excise and Gold (Control) Appellate Tribunal. Subsequently, the respondent filed a Writ Petition in the Bombay High Court claiming interest on the excess duty refunded, alleging wrongful retention by the revenue. The High Court granted the claim for interest at 12% per annum from a specified date until payment. The revenue appealed this decision.

The Supreme Court analyzed the basis of the claim for interest made in the Writ Petition u/s Article 226 of the Constitution and the issuance of a writ of mandamus by the High Court. It was noted that there was no statutory provision obligating the revenue to pay interest on the refunded amount, and the claim was not supported by any other legal basis. The Tribunal's order did not specify the revenue's liability to refund a particular amount to the respondent, thus lacking a legal foundation for the claim of interest.

In conclusion, the Supreme Court set aside the High Court's judgment, allowing the revenue's appeal and dismissing the respondent's Writ Petition. The Court emphasized the absence of a legal obligation on the revenue to refund a specific sum on a particular date, which was essential for the issuance of a writ of mandamus in this case.

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