Refundable pre-deposit carries interest from three months after the final appellate order, with 12% applied in this case.

Interest was payable on a refundable pre-deposit made under an interim order, because amounts refundable under Section 35F carry interest as a settled principle. The Tribunal accepted 12% per annum as the applicable rate and directed that interest run from the date of expiry of three months after the final appellate order until the date of payment. The assessee was therefore entitled to interest on the refunded pre-deposit for that period.

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Issues: Whether interest was payable on the refund of the pre-deposit made pursuant to the interim order, and at what rate and from what date.

Analysis: The application sought directions for refund of the pre-deposit of Rs. 1 crore made under the interim order. The refund was ultimately ordered, and the question that survived was whether the assessee was also entitled to interest on that amount. Relying on the settled position that pre-deposit amounts refundable under Section 35F carry interest, the Tribunal held that interest was payable on the refunded sum. The Tribunal accepted 12% as the appropriate rate and directed that interest run from the date of expiry of three months from the final appellate order till the date of payment.

Conclusion: Interest on the refunded pre-deposit was allowed at 12% per annum for the specified period, in favour of the assessee.

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