STATE OF PUNJAB vs M/S. ATUL FASTENERS LTD.

The Supreme Court held that the High Court erred in granting interest at 18% per annum on the refund amount of Rs. 42,62,807 from 21.12.2001, as there is no statutory provision for such interest under the Punjab General Sales Tax (Deferment and Exemption) Rules, 1991. The Court emphasized that interest in tax matters can only be granted based on statutory provisions or agreements, not on equitable grounds. Consequently, the appeal by the State was allowed, and the grant of interest was set aside.