2012 (9) TMI 909

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..... (C) No. 5840 of 2011, challenge is to the order dated August 3, 2011 and a direction is sought for payment of interest on the refund which was due as per the provisions of section 32 of the Assam General Sales Tax Act, 1993. Case of the petitioner is that it is manufacturing chemical from tea waste and for that purpose tea waste is purchased and tax is paid under section 7(2) of the Act. A scheme has been framed under the provisions of section 9(4) of the Act called the Assam Industries (Sales Tax Concession) Scheme, 1997 which provides for refund of tax paid to the eligible units, on application being filed within 90 days from the date of expiry of the year to which refund relates. Refund is governed by section 30 read with section 32 of....

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....any provision of granting refund of tax suffered on purchase of raw materials by an eligible industrial unit. The para 11(a) of the 1997 scheme although laid down that such refund shall be governed by the provisions of section 30 of the Assam General Sales Tax Act, 1993 and the Rules made thereunder, the substantive law applicable in the case of granting refund can be found only in para 11(a) of the 1997 scheme and not in section 30 of the Assam General Sales Tax Act, 1993 and the Rules made thereunder which clearly have been adopted by the 1997 scheme only for the procedural purpose of granting such refund. The Government notification No. FTX. 65/97/115 dated September 20, 1997, notifying the Assam Industries (Sales Tax Concession) Scheme,....

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....e interest so payable." A perusal of the above shows that refund is required to be made within 90 days and if refund is made beyond 90 days of the refund if due and if the same is delayed, simple interest at the rate of one percentum per month is payable. The provision makes no difference whether the refund is on account of assessment order or on account of the provisions of the scheme. Object of the provision is to restore loss caused by the delay in denial of use of money. Thus, interest is compensatory and equitable. The provision cannot be interpreted to reject an equitable and compensatory claim clearly covered under the said statutory provision. In South Eastern Coalfields Ltd. v. State of M.P. [2003] 1 RC 813; [2003] 8 SCC 648, it....