JUDGMENT
P.K. Misra, J.
1. By this writ petition, challenge has been made to the order dated November 28, 2000 passed by the Sales Tax Officer, Sambalpur III Circle, Jharsuguda. By the said order, he has calculated the amount of interest payable to the petitioners on the refunded amount at Rs. 31,16,438, as against their claim of Rs. 73,73,424.
2. Brief facts of the case are as follows :
Petitioner No, 1 is a company incorporated under the Indian Companies Act and petitioner No. 2 is its Vice-President. For the assessment year 1993-94, the Sales Tax Officer rejected the books of accounts of the company and raised a demand of Rs. 33,48,97,000 thus enhancing the original assessment by Rs. 3,04,48,546. Against the said order, the petitioners filed first appeal before the Assistant Commissioner, but were not successful. Therefore, they preferred second appeal before the Sales Tax Tribunal. When the matter was pending before the Tribunal, notice of attachment was issued on them by the Sales Tax Officer. Being aggrieved by such notice, they approached this Court by filing a writ petition which was registered as O.J.C. No. 1969 of 1996. By order dated March 11, 1996, this Court lifted the order of attachment and directed the petitioners to deposit a sum of Rs. 50,00,000 on or before March 25, 1996 without prejudice and subject to the result of the writ petition. This Court also made it clear that in case the petitioners would be entitled to refund, they can ask for the same together with interest which would be calculated on and from the date of deposit and not from the date of formal application for refund. It may be stated here that the petitioners had also moved an application of stay before the Commissioner of Sales Tax. While disposing of the said application, the Commissioner directed the petitioners to deposit a sum of Rs. 1,00,00,000 by September 15, 1996. Against that order, the petitioners again approached this Court in O.J.C. No. 9735 of 1996. By order dated September 17, 1996, taking note of the fact that the petitioners had already paid Rs. 50,00,000, this Court directed them to pay a further sum of Rs. 25,00,000 by September 23, 1996 without prejudice. Petitioners duly deposited the amounts as directed by this Court.
While disposing of the second appeal, the Tribunal remanded the matter to the Assistant Commissioner. Against the said order, the State filed an application before the Tribunal for making a reference to this Court, but the Tribunal refused to do so observing that there was no question of law involved. After remand, the Assistant Commissioner reconsidered the matter and directed for refund of Rs. 75,00,000 to the petitioners by his order dated July 1, 2000, copy whereof is annexure 1. The petitioners filed an application for refund on July 24, 2000, copy of which is at annexure 2. As stated earlier, the petitioners had claimed Rs. 73,73,424 towards interest, but the Sales Tax Officer has allowed Rs. 31,16,438 only on that head. While doing so, he has awarded interest at the rate of 10 per cent per annum, on the refundable amount of Rs. 75,00,000, calculating it from the date of deposit.
3. The questions now arise for determination are :–
(i) What should be the rate of interest payable to the petitioners on the deposit of Rs. 50,00,000 in absence of any percentage fixed by this Court by order dated March 11, 1996 ?
(ii) From what date interest is payable on Rs. 25,00,000, which was directed to be deposited by this Court by order dated September 17, 1996 ?
4. The petitioners’ claim is that they are entitled to interest at the rate of 18 per cent for the first 90 days and at the rate of 24 per cent thereafter from the dates of deposit of the total amount of Rs. 75,00,000 in view of the provisions of Section 14-C of the Orissa Sales Tax Act, as, according to them, the latter direction to pay Rs. 25,00,000 is an extension of the earlier order. The department has filed counter-affidavit wherein our attention has been drawn to the Full Bench decision of this Court in O.J.C. No. 9087 of 1997, disposed of on October 16, 2000 Reported as I.D.L. Industries Ltd. V. State of Orissa [2004] 134 STC 62. By the said decision, this Court has held that interest on refund of deposit made pursuant to the direction of the Court shall be from such date and at such rates as directed by the said Court. It is urged that in the present case, there was no direction about the rate at which interest would be payable. In absence of any such direction, the Commissioner has thought it reasonable to allow interest at the rate of 10 per cent and accordingly the same has been granted. It is further submitted that in view of the amendment of Section 14-C with effect from October 3, 2000, though the refund application was made on July 24, 2000, interest is. payable at the rate of 10 per cent. Therefore, the writ petition should be dismissed in limine. Rather, the petitioners should be directed to refund the amount of interest granted in their favour on the deposit of Rs. 25,00,000, as this Court had not given any direction regarding payment of interest on the said deposit.
5. We have considered the rival submissions. While directing the petitioners to deposit Rs. 50,00,000, this Court has made it clear that interest shall be calculated from the date of deposit and not from the date of formal application of refund. Of course, this Court has not indicated at what rate interest is payable. But the mention of “the date of formal application” clearly indicates that this Court was referring to Section 14-C of the Orissa Sales Tax Act, which reads as under prior to its amendment in 2000 :–
“14-C. Payment of interests on refundable amount.–Amounts refundable under Section 14, if not refunded within ninety days from the date of receipt of the application in that behalf from the dealer, shall carry interest at the rate of eighteen per cent per annum for the first ninety days and thereafter at the rate of twenty-four per cent per annum, with effect from the date of expiry of the period specified above.”
Therefore, we are inclined to hold that interest is payable on the sum of Rs. 50,00,000 as provided under Section 14-C prior to its amendment, i.e., at the rate of 18 per cent for the first ninety days and at the rate of 24 per cent thereafter from the date of deposit, as the said amount was refunded prior to the amendment of Section 14-C with effect from October 3, 2000. With regard to payment of interest on Rs. 25,00,000, there being no direction for payment of interest from the date of deposit, the petitioners are entitled to interest at the rate of 18 per cent for the first ninety days and at the rate of 24 per cent thereafter from the date of making the formal application for refund. We direct accordingly.
6. In the result, the writ petition is disposed of with the aforesaid direction. The Sales Tax Officer is directed to recalculate the amount of interest in accordance with our direction. In case the amount so recalculated exceeds the amount of interest already paid, the balance shall be paid to the petitioners within a period of one month from the date of receipt of this order. If, however, it is found that excess amount has been paid to the petitioners, they shall deposit the excess within a period of one month from the date, the recalculation of interest is made available to them by the Sales Tax Officer.
R.K. Patra, A.C.J.
7. I agree.