2011 (2) TMI 1638 - HC - Indian Laws

Summary

The case before the Allahabad High Court involved a dispute regarding the refund of money deposited by the Petitioner under an order of the Additional District Magistrate (Finance and Revenue) for short paid stamp duty and penalty. The Petitioner sought a refund of the money without interest, while the Petitioner contended that interest should be paid by the State Government as a necessary corollary to the retention of the money.**Issues Presented and Considered:**1. Whether interest should be paid on the money retained by the State Government when ordered to be refunded by the appellate or revisional authority.**Issue-Wise Detailed Analysis:****Relevant Legal Framework and Precedents:**- The Court referred to Section 45 of the Indian Stamp Act, which empowers revenue authorities to refund penalty or excess duty in certain cases.- The Court cited the case of Wig Brothers (Builders & Engineers) (P) Ltd. v. Union of India, where it was held that payment of interest is a necessary corollary to the retention of money.**Court's Interpretation and Reasoning:**- The Court opined that interest on the money retained by the State Government is necessary when ordered to be returned by the appellate or revisional authority, as it is not penal or compensatory in nature.- The Court distinguished the application of Section 45 of the Indian Stamp Act in the present case, stating that the order for deposit of money towards short-fall stamp duty and penalty was set aside by the revisional authority, rendering the demand and collection of money illegal.**Key Evidence and Findings:**- The Petitioner sought a refund of the money deposited without interest, while the State argued that no interest is payable under Section 45 of the Indian Stamp Act.- The Court considered the judgment in the case of Anshu Chhabara v. Collector, Jhansi, where payment of interest was directed in similar circumstances.**Application of Law to Facts:**- The Court held that interest should be paid by the State Government at the rate of 8% per annum from the date the money was deposited until the date of actual repayment, preferably within two months from the filing of a certified copy of the order before the Additional District Magistrate (Finance and Revenue), Mathura.**Significant Holdings:**- The Court established the principle that interest on money retained by the State Government for refund is necessary when ordered by the appellate or revisional authority.- The final determination was that the Respondent must pay interest at the rate of 8% per annum on the deposited money until actual repayment.In conclusion, the Allahabad High Court ruled in favor of the Petitioner, directing the State Government to pay interest on the money deposited for short paid stamp duty and penalty, emphasizing the necessity of such interest as a corollary to the retention of the funds.