2001 (10) TMI 1132 - HC - VAT and Sales Tax

Summary

Issues:
Rate of interest payable on deposit of Rs. 50,00,000 in absence of fixed percentage by the Court.
Date from which interest is payable on Rs. 25,00,000 directed to be deposited by the Court.

Analysis:
The petitioners challenged the order of the Sales Tax Officer regarding the calculation of interest payable on a refunded amount. The case involved a series of legal proceedings starting from the rejection of the company's accounts by the Sales Tax Officer, leading to appeals and directions from the Court for depositing specific amounts. The main contention was the calculation of interest on the refunded amount, with the petitioners claiming a higher interest rate based on the provisions of section 14-C of the Orissa Sales Tax Act. The Sales Tax Officer had allowed interest at a rate of 10% per annum, leading to the dispute.

The first issue addressed was the rate of interest payable on the deposit of Rs. 50,00,000 in the absence of a specific percentage fixed by the Court. The Court referred to section 14-C of the Orissa Sales Tax Act, which provided for interest rates of 18% for the first 90 days and 24% thereafter on refundable amounts. Since there was no direction on the interest rate in the Court's order, the petitioners were entitled to interest at the rates specified in section 14-C prior to its amendment.

The second issue involved determining the date from which interest is payable on Rs. 25,00,000 directed to be deposited by the Court. As there was no specific direction for payment of interest from the date of deposit, the Court held that the petitioners were entitled to interest at the rates of 18% for the first 90 days and 24% thereafter from the date of making the formal application for refund. The Court directed the Sales Tax Officer to recalculate the interest amount based on their decision and instructed the parties to make payments accordingly.

In conclusion, the Court disposed of the writ petition with directions to recalculate the interest amount and make necessary payments within specified timelines. The judgment clarified the applicable interest rates based on the provisions of the Orissa Sales Tax Act and resolved the dispute regarding the calculation of interest on the refunded amount.