VIKRANT TYRES vs FIRST INCOME TAX OFFICER, MYSORE

The Supreme Court addressed the applicability of Section 220(2) of the Income Tax Act, 1961, in relation to interest on tax demands after refunds were issued. The Court held that once the tax was paid in compliance with the original demand, the demand notice ceased to have statutory force, and thus, the Revenue could not invoke Section 220(2) for interest on the refunded amount. The Court concluded that the High Court's interpretation of the Validation Act was incorrect, leading to the reversal of the High Court's decision.