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CMA Final · Direct Tax Laws and International Taxation · Grievance Redressal

Meera Exports lodged a grievance on 1 July about a refund of ₹2,40,000 not being processed. The department resolved it on 31 August by issuing the refund. Assuming the refund is otherwise due and the grievance does not alter the statutory interest entitlement, which statement is correct?

Interest on a refund is governed by the statute's own period and rate, not by when the taxpayer lodged a grievance or when it was resolved. Filing a grievance does not start, stop or cancel statutory interest, so the grievance dates are irrelevant to its computation.

  1. AInterest on refund, if provided by the Act, is determined by the statutory provisions and period, not by the grievance datesCorrect
  2. BInterest runs only from 1 July, the date of grievance
  3. CNo interest is ever payable once a grievance is filed
  4. DInterest is payable only from 31 August

Explanation

Refund interest is a statutory entitlement computed under the Act's own period, typically linked to the dates of the return or the tax payment. The grievance date neither starts nor stops it. Options B and D wrongly tie interest to grievance dates, and C is incorrect.

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