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Issues involved: Interpretation of provisions of Orissa Sales Tax Act, 1947 regarding entitlement to interest on refund as per High Court order under articles 226 and 227 of the Constitution.
Summary: The Supreme Court considered whether the Orissa Sales Tax Act, 1947 would affect the appellants' entitlement to interest on a refund as per a High Court order made under articles 226 and 227 of the Constitution. The appellants challenged an interim order by the Additional Commissioner of Sales Tax in a writ petition before the High Court, which directed refund with interest if the appellants succeeded in a second appeal. Subsequently, the appellants succeeded, but instead of seeking repayment from the State, they applied under the Act for a refund. The State denied them the interest granted by the High Court. The appellants then filed another writ petition before the High Court, which ruled they were entitled only to interest under section 14 of the Act. Dissatisfied, the appellants appealed to the Supreme Court. The Supreme Court noted that the High Court's earlier order was not made under the Act but under constitutional powers, directing the refund with 18% interest upon success in the second appeal. The Court held that the State, having benefited from the High Court's order, could not now refuse to follow it and rely solely on statutory provisions. Since the High Court's order mandated the refund with interest, the Court determined that the refund should include 18% interest from the date of deposit as per the High Court's order. Consequently, the appeal was allowed in favor of the appellants.
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