Allowing the petition, the Court held that the State, having received the money without right, and having retained and used it, is bound to make the party good, just as an individual would be under like circumstances. The obligation to refund money received and retained without right implies and carries with it the right to interest. Whenever money has been received by a party which ex aequo et bono ought to be refunded, the right to interest follows, as a matter of course. When the collection is illegal, there is a corresponding obligation on the Department to refund such amount with interest inasmuch as they have retained and enjoyed the money deposited. A refund due and payable to the assessee is a debt owed and payable by the Department. (AY.2018-19)
Group M Media India Pvt. Ltd. v. Dy. CIT (IT) [2023] 157 taxmann.com 487 / (2025) 483 ITR 593 (Bom)(HC)
S. 244A : Refunds-Interest on refunds –Equalisation levy-Refund Interest on refund equalisation levy paid by assessee after three years compensation for use and retention of money collected in excess-Direction for payment of interest at rate of six per cent. From April 1 of the year following the financial year in which excess payments were made by assessee till date of actual refund-When the collection is illegal, there is a corresponding obligation on the Department to refund such amount with interest inasmuch as they have retained and enjoyed the money deposited. A refund due and payable to the assessee is a debt owed and payable by the Department.[Finance Act, 2016, ss. 164(i), 165, 166, 168(1), Art. 226]
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