Delayed refund interest continues until court-fixed payment date, with non-compliance risking contempt action.

Where a refund is paid belatedly, interest continues to run until the date fixed by the Court for actual payment. The Bombay High Court noted that the refund had already been received but the balance interest remained unpaid, and therefore directed payment of the outstanding interest up to 1 March 2024 in favour of the assessee. The Court also warned that non-compliance with the direction could amount to wilful disobedience and expose the defaulter to contempt action.

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Issues: Whether the respondents were liable to pay the balance interest on the delayed refund and, if so, up to what date.

Analysis: The Court recorded that the refund had already been received, but the balance interest remained unpaid. Taking note of the continuing delay, the Court fixed 1 March 2024 as the terminal date for calculation of interest and directed payment of the balance interest by that date, warning that non-compliance would amount to wilful disobedience and may invite contempt action.

Conclusion: The balance interest on the delayed refund was directed to be paid up to 1 March 2024, in favour of the assessee.

Final Conclusion: The petition was disposed of with a positive direction for payment of the balance interest within the time granted by the Court.

Ratio Decidendi: Where refund is belatedly paid, interest continues to run until the date fixed by the Court for actual payment, and failure to comply with such direction may attract contempt consequences.

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