Deemed rectification and delayed refund interest cannot be defeated by later void proceedings under sales tax law.

A rectification application under the Karnataka Sales Tax Act that was not rejected within the statutory 60-day period was deemed allowed by operation of law, and the assessments stood amended accordingly. A later rectification order, and the revisional, reassessment, refund and appellate proceedings founded on it, were without jurisdiction and could not displace the assessee's accrued statutory entitlement. The refund period had to run from receipt of the rectification application, and the delay exceeded the permissible refund period. The assessee was therefore entitled to interest on the delayed refund, and the Tribunal's order was liable to be set aside.

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Issues: Whether the rectification application filed by the assessee was deemed to have been allowed on expiry of 60 days under the Karnataka Sales Tax Act, whether the subsequent rectification, revisional and assessment proceedings could survive, and whether the assessee was entitled to interest on the delayed refund under Section 13-A of the Karnataka Sales Tax Act, 1957.

Analysis: The rectification application was received on 22.01.2010 and was not rejected within 60 days. By virtue of the second proviso to Section 25-A(1), the application stood deemed allowed and the assessments stood amended by operation of law. Once such deemed rectification had come into force, a later rectification order passed on 08.04.2010 was without jurisdiction. The subsequent revisional order, fresh assessment, refund notice and appellate order rested on that void rectification and could not defeat the assessee's accrued statutory entitlement. The refund period had to be computed from the date of receipt of the rectification application, and the delay extended beyond the statutory period for refund.

Conclusion: The assessee was entitled to interest at 6% per annum for the delayed period, and the impugned Tribunal order was liable to be set aside.

Ratio Decidendi: Where a rectification application is not rejected within the statutory period, deemed amendment follows by operation of law and any later contrary order is without jurisdiction; an accrued right to interest on delayed refund cannot be defeated by such void subsequent proceedings.

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