1. The facts that gave rise to this petition are simple. The petitioner was assessed for the year 1976-77 by Ex. P-1 dated March 31, 1977. On appeal, considerable reduction was obtained by him under Ex. P-2 order of the AAC dated November 4, 1977. On further appeal by the department, the Tribunal by Ex. P-4 order dated 3rd January, 1980, reversed the order of the AAC, thereby restoring Ex. P-l order.
2. After Ex. P-l order the petitioner had fully paid the tax as computed by the ITO. On the decision of the AAC the petitioner received from the department the amount which was allowed. This is seen from Ex. P-3 dated 30th November, 1977, which is the order of refund. By Ex. P-5 dated 26th February, 1980, a demand was served on the petitioner calling upon him to pay back the amounts which remained due from him as per Ex. P-1. The question is whether the petitioner is liable to pay interest between 30th November 1977, when the amounts were refunded to him by the department and 26th February, 1980, when the fresh notice of demand was served on him, viz., Ex. P-5 subsequent to Ex. P-4 order of the Tribunal on 3rd January, 1980. In so far as the petitioner had paid the amount at the right time and received the refund as per the order of the AAC, he had no liability to pay any amount to the department until Ex. P-5 notice of demand was served on him consequent upon the reversal of the order of the AAC by the Tribunal. The petitioner's liability to pay interest, therefore, arises only on 26th February, 1980, which is the date of demand. This is so declared. Exhibit P-5, in so far as it has levied interest under Section 220(2) from 30th November, 1977, to 26th February, 1980, is unsustainable. It is quashed to that extent. This O.P. is allowed in the above terms. No costs.