Facts :

• Petitioner deposited ₹34,67,438 as pre-deposit for filing appeal against stamp duty demand.
• The original demand order was set aside and matter remanded; ultimately no demand survived.
• Despite this, refund was delayed for several years and only principal amount was returned without interest.
• Petitioner filed writ seeking interest on the delayed refund amount.

Court Decision:

• Retention of petitioner’s money after setting aside demand was unauthorised.
• Even in absence of statutory provision, interest is payable based on principles of restitution.
• State cannot retain money without compensating the party for deprivation of its use.
• Non-payment of interest while charging interest from assessee is discriminatory.

Directions:

• Petitioner entitled to simple interest @ 8% per annum.
• Interest payable from date of deposit (15.12.2005) till date of refund (29.05.2014).
• Respondents directed to pay interest within stipulated time.
• General mandamus issued to State to pay interest on refunds in similar cases.

Cases Referred by Court:

• Union of India v. Tata Chemicals Ltd.
• Hello Minerals Water (P) Ltd. v. Union of India
• Union of India v. Oriental Enterprises
• Secretary, Irrigation Dept. v. G.C. Roy
• Sham Lal Narula v. CIT
• South Eastern Coalfields Ltd. v. State of M.P.
• Sandvik Asia Ltd. v. CIT
• Ghaziabad Development Authority v. Balbir Singh
• ONGC Ltd. v. Commissioner of Customs
• Hari Chand v. State of U.P.