Law:

Section:

Section 244, read with section 243, of the Income-tax Act, 1961 - Refund - Interest on - Whether, where refund of certain amount is ordered by High Court subject to furnishing bank guarantee, interest, if any, earned on that amount in meantime, has also to be paid on furnishing bank guarantee in like amount to satisfaction of Court - Held, yes FACTS The respondent had filed a suit in the Court for declaration and injunction in respect of the income-tax refund of Rs. 1,60,000. The respondent had also applied for an injunction restraining payment of said amount to the petitioner K. The trial Court directed the payment of this amount to the petitioner. On appeal, the Court directed that the amount of Rs. 1,60,000 be released to the petitioner on furnishing bank guarantee of the like amount. Bank guarantee had, accordingly, been furnished and the amount had been paid to the petitioner. The petitioner applied to the trial Court that the interest which had become due must also be paid. The trial Court declined to pass the order. On revision petition: HELD In the instant case, the Additional District Judge had failed to exercise his jurisdiction. Once the High Court had given a direction that the amount of Rs. 1,60,000 be released to the petitioner on furnishing bank guarantee, the necessary corollary was that the interest earned on the amount should also follow the principal and the amount of interest might be paid to the petitioner on furnishing bank guarantee in the like amount to the satisfaction of the Court. The revision was disposed of accordingly. S.C. Bagdia for the Applicant. P.K. Saxena for the Respondent. JUDGMENT Pandey, J.-This revision has been directed against an order passed in CS No. 42-A of 1986, dated 27-8-1990, by the Additional Distt. Judge, Indore, whereby the learned Judge refused to direct the payment of interest amount to the petitioner. 2. The brief facts of the case are that the respondent No. 3, namely, National Textile Corpn. (NTC), Indore filed a suit in the Court for declaration and injunction in respect of the income-tax refund of Rs. 1,60,000. The respondent No. 3 also applied for an injunction restraining payment of this amount to…

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