Refund interest on provisional assessment starts after final assessment, not from the refund application date.

Interest on a sanctioned refund arising from provisional assessment accrues only after the assessment is finalised, because the refund becomes legally due at that stage and not on the date of the refund application. On that reasoning, interest starts after the expiry of three months from the date of final assessment, at the rate prevailing during the relevant period. The refund claimant was therefore entitled to interest from 17-5-2001, being three months after finalisation on 16-2-2001, and not from the earlier refund claim date.

---

---

Issues: Whether interest on the sanctioned refund arising out of a provisional assessment was payable from the date of filing of the refund claim or only from the date when the assessment was finalised.

Analysis: The refund became due only when the assessment was finalised. Until finalisation, no refund amount was legally payable, so interest could not run from the earlier date of the refund application. Interest was therefore held payable only after the expiry of three months from the date of final assessment, at the rate prevailing during the relevant period.

Conclusion: Interest on the sanctioned refund was payable from 17-5-2001, being three months after finalisation of assessment on 16-2-2001, and not from 22-4-1997.

---