Sanctioned rebate cannot be withheld against disputed dues; statutory interest and costs follow for delayed release.

Sanctioned rebate and refund amounts cannot be withheld or appropriated against alleged dues, including dues under an order still under challenge, where the assessee is otherwise entitled to payment. The Court rejected the department's administrative-delay explanation and held that the assessee was entitled to release of the sanctioned amount with statutory interest for delayed payment. It further held that the delay justified costs, and directed that the interest and costs be recovered from the responsible officers after inquiry and further departmental action.

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Issues: Whether the assessee was entitled to payment of the sanctioned rebate/refund amount without adjustment against alleged dues, together with statutory interest for delayed payment and costs, and whether the department's delay could be justified on administrative grounds.

Analysis: The rebate claims had been sanctioned, yet the amounts were withheld or appropriated against dues of another concern and against dues under an order that was under challenge. The objections raised by the department did not justify withholding of the sanctioned rebate, and the explanation of administrative hassles was rejected. The Court held that where the assessee was entitled to rebate without such adjustment, the department was bound to release the amount with statutory interest. The Court also found that the delay warranted costs and that the officers responsible for the delay should bear the financial consequences, subject to inquiry and further action by the department.

Conclusion: The petitioner was held entitled to the refund amount, statutory interest on the delayed payments, and costs, with directions that the amounts of interest and costs be recovered from the responsible officers after inquiry.

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