Statutory interest on delayed tax refund follows when excess tax is returned beyond the permissible period.

Statutory interest was held payable on a delayed refund of excess tax because the reassessment reduced the tax liability and the authorities did not process the refund promptly after the taxpayer's representations. The Court applied Section 39(5) of the Chhattisgarh Value Added Tax Act, 2005 and held that once refund was made beyond the permissible time, the statutory consequence of interest followed for the period the amount remained unpaid. Relief was confined to interest on the refunded sum, and the refunding authority was directed to release that interest within the stipulated time.

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Issues: Whether the petitioner was entitled to statutory interest on the refunded amount for the period of delay in payment of excess tax recovered.

Analysis: The reassessment order reduced the tax liability, and the excess amount was ultimately refunded only after the writ petition had been filed. The Court held that the authorities ought to have processed the refund promptly after receipt of the petitioner's representations, and that the refund having been made belatedly, the statutory consequence under Section 39(5) of the Chhattisgarh Value Added Tax Act, 2005 was attracted. Interest was therefore payable on the refunded sum for the period during which the amount remained unpaid beyond the permissible time.

Conclusion: The petitioner was entitled to interest at 0.5% per month on Rs. 60,62,081/- from 20.03.2025 till 31.10.2025.

Final Conclusion: Relief was confined to payment of statutory interest on the delayed refund, and the petition stood disposed of with a direction to release the interest within the stipulated period.

Ratio Decidendi: Where excess tax is refunded belatedly, statutory interest becomes payable for the period of delay under the governing refund provision.

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