High Court Orders Interest on 25-Year-Delayed Excise Refund to Haryana Power Utility

In a major relief to Haryana Vidyut Prasaran Nigam Limited (HVPNL), the Punjab and Haryana High Court has ruled that the company is entitled to interest on an excise duty refund that was delayed for over a decade, in a dispute stretching back nearly 25 years.

The matter dates to the late 1980s, when the power transmission utility received a show-cause notice over excise duty on fabricated steel structure towers. Though HVPNL contested the levy, it deposited around ₹30 lakh under protest, stating that the payment was made under pressure and without accepting liability.

In 1987 and again in 1990, appellate authorities ruled in favour of the company, effectively clearing it of the duty demand. Despite these decisions, the refund was not released promptly. HVPNL continued writing to the department, but the amount was finally sanctioned only on December 29, 2000 — years after the favourable rulings.

However, while the principal amount was returned, the question of interest on the delayed refund remained unresolved, forcing the corporation to approach the High Court.

Allowing the petition, the court held that under Section 11BB of the Central Excise Act, 1944, the company had a clear statutory right to interest on delayed refunds. The Bench observed that once the appellate authorities ruled in favour of HVPNL, the department was duty-bound to release the amount within the prescribed timeline.

The court also underlined that since the duty had been deposited under protest and the final orders favoured the company, the consequences of administrative delay could not be shifted onto the petitioner.

The judgment reinforces accountability in tax administration, sending a clear message that delayed refunds cannot escape statutory interest obligations.