Refund of withheld tax with statutory interest ordered after unjustified departmental delay and prolonged non-payment.

When a refundable tax amount has been determined but withheld without justification, the assessee is entitled to refund with statutory interest, including interest under Section 244A(1A) of the Income-tax Act, 1961. The Court found the departmental inaction wholly unjustified after prolonged non-payment despite repeated grievance, and rejected the request for further time as unreasonable on the facts. The refund was directed to be released within the time fixed by the Court, and continued default would attract personal costs against the concerned officer.

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Issues: Whether the petitioner was entitled to refund of Rs. 5,37,77,310/- arising from fringe benefit tax proceedings with applicable interest, and whether costs were warranted for the prolonged non-payment.

Analysis: The refund amount had been identified by the Assessing Officer, yet it remained unpaid for years despite the petitioner's repeated grievance. The Court held that the departmental inaction was wholly unjustified and that the petitioner was entitled to the refundable amount together with interest, including interest under Section 244A(1A) of the Income-tax Act, 1961. The Court also found the respondents' request for additional time unreasonable in the facts of the case.

Conclusion: The petitioner succeeded on the refund claim with interest, and the respondents were directed to make payment by the stipulated date, failing which personal costs of Rs. 1,00,000/- would be payable by the concerned officer.

Final Conclusion: The writ petition was allowed and the revenue was directed to release the refund with statutory interest within the time fixed by the Court.

Ratio Decidendi: When a refundable tax amount has been determined but is withheld without justification, the assessee is entitled to refund with statutory interest, and prolonged departmental inaction may justify personal costs.

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