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2015 (5) TMI 915 - HC - VAT and Sales TaxClaim of interest on refund - Refund claim was adjusted towards penalty imposed - Penalty for charging tax at higher rate - Held that:- On an order being made by the First Appellate Authority on 04.10.1988 that a decision was taken by the Assessing Authority on 16.05.1989 to the effect that the money cannot be returned in view of Section 29 (3) of the Sales Tax Act. The issue of refusal to refund the money due under Section 29(3), in our opinion, would only arise when something becomes payable to the assessee under orders of the competent authority which in the facts of the case would be the order of the First Appellate Authority dated 04.10.1988. - under Section 29(1) proviso of the Sales Tax Act, a power has been conferred upon the taxing authority to adjust any amount which is refundable against any other outstanding of the assessee. It is with reference to this power that the amount of excess tax which was paid by the assessee had been adjusted by the department against the amount of penalty which was levied under Section 15-A(1)(QQ). It is also relevant to note that Explanation II to Section 29 provides that the refund would include any adjustment under sub-section 1 of Section 29 of the Act. In the facts of case, the order for refund of the money adjusted against penalty was directed to be returned to the assessee under the order dated 04.10.1988 which order stands affirmed up to the High Court. Therefore, the liability to make payment of interest under sub Section 29(2) would accrue from the date the order of the First Appellate Authority was received by the department. - it is a fit case to issue a writ of mandamus directing the Assessing Authority to re-calculate and pay the interest for the period commencing from the date the Assessing Authority had received the order of the First Appellate Authority dated 04.10.1988 till 27.12.2002 at the rates as were applicable from time to time to the assessee. - Decided in favour of assessee.
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