Union Of India Tr.Dir.Of I.T vs M/S Tata Chemicals Ltd

The Supreme Court ruled that the revenue is obligated to pay interest on tax refunds under Section 244A of the Income Tax Act, 1961, which mandates interest on refunds due to the assessee. The Court clarified that this obligation applies to refunds made under Section 240 of the Act for assessment years post 01.04.1989, following the amendment by the Direct Tax Laws (Amendment) Act, 1987. The appeals were dismissed, affirming the lower court's decision that the revenue must comply with the interest payment provisions.