Orissa High Court
M/S. Mukand Ltd vs State Of Orissa And Others on 14 March, 2022
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) Nos.3158 and 5222 of 2004
In W.P.(C) No.3158 of 2004
M/s. Mukand Ltd. .... Petitioner
Mr. Bibik Mohanty, Senior Advocate
-versus-
State of Orissa and others .... Opposite Parties
Mr. Sunil Mishra, A.S.C.
In W.P.(C) No.5222 of 2004
M/s. Bharat Heavy Electricals Ltd. .... Petitioner
Mr. Bibik Mohanty, Senior Advocate
-versus-
State of Orissa and others .... Opposite Parties
Mr. Sunil Mishra, A.S.C.
CORAM:
THE CHIEF JUSTICE
JUSTICE A.K. MOHAPATRA
ORDER
Order No. 14.03.2022
04. 1. These two writ petitions have been again listed before this
Court only as a fall out of the Full Bench decision of this Court
in IDL Industries Ltd. v. State of Orissa (2004) 134 STC 62
(Orissa).
2. The question before the Full Bench concerns the payment of
interest under Section 14 C of the Orissa Sales Tax Act 1947 on
the amount refunded.
3. The Full Bench answered the question referred to it in
paragraph-68 of the judgment. Immediately relevant for the
present purposes is a direction contained in paragraph-68 (6),
which reads as under:
"(6) When a dealer is directed to deposit some
amount as per the orders of the High Court and
the Supreme Court he is entitled to get
compensation by way of interest on the amount
of refund ultimately calculated from such date at
such rate as is directed by the said Courts."
4. Mr. Mohanty, learned Senior Advocate appearing for the
Petitioner places reliance on the judgment in Tata Refractories
Ltd. v. Sales Tax Officer (2003) 1 SCC 65 and urges that the
interest should begin to run from the date of the deposit.
5. Mr. Sunil Mishra, learned Additional Standing Counsel for the
Department however resists the above submission by stating that
an earlier order passed by this Court on 10th April 2019 in
W.P.(C) No.9048 of 2004 granting interest from the date of
assessment was recalled by this Court subsequently by an order
dated 24th December, 2019.
6. Be that as it may, the question is only this: what should be the
date from which interest on the refund amount should become
payable? The incidental question is at what rate should such
interest be paid.
7. From the point of view of the Assessee, since this is a question
of interest on refund, it is clear that if the Assessee is entitled to
refund, the interest should begin to run from the date on which
the Assessee parted with the money in the first instance.
8. The refund itself is as a result of a finding that the tax ought
not to have been collected from the Assessee in the first place. If
the tax has to be refunded, clearly therefore in the considered
view of the Court, the interest thereon should begin to run from
the date of the deposit of such tax.
9. Consequently, the issue in both the writ petitions is answered
as under:
The Department will pay to each of the Assessee simple interest
@6% per annum on the amount of refund from the period
beginning with the date of making payment of the sales tax in the
first instance till the date of actual payment which shall not be
more than eight weeks from today. If there is any further delay
than the above period in making the refund, the Department will
be liable to pay simple interest @9% per annum on the said sum
for the period of delay.
10. The writ petitions are disposed of in the above terms.
11. An urgent certified copy of this order be issued as per rules.
(Dr. S. Muralidhar)
Chief Justice
(A.K. Mohapatra)
Judge
S.K. Guin
