By the Court.—Heard Shri Praveen Kumar, Advocate on behalf of the petitioner and the Shri C.B.Tripathi, Special Counsel on behalf of the department.

2. Petitioner before this Court seeks a writ of mandamus directing the respondents to pay interest on the amount directed to be refunded under the order of the Appellate Authority dated 4.10.1988, enclosed at page 44 of the present writ petition.

3. Facts in short leading of the present petition are as follows :

The assessee, who is engaged in confectionery business and was a registered dealer, was assessed for the year 1982-83 and 1983-84 under the U.P. Sales Tax Act.

4. Under the assessment order it was held that the assessee was liable to pay tax @ 8% on confectionery items. Accordingly, the tax was deposited by the assessee. However the High Court in the case of Commissioner, Sales Tax v. M/s. Babani & Co., 1984 UPTC 81, held that on confectionery items the rate of tax applicable would be 4% only. The assessee made an application under Section 22 of the Sales Tax Act which was allowed and it was held that the assessee was liable to pay tax @ 4% but while passing the said order under Section 22 of the Trade Tax Act, the Assessing Authority decided to proceed against the assessee under Section 15-A (1)(QQ) of the Sales Tax Act. He imposed a penalty of Rs. 1,80679/- for the year 1982-83 and Rs. 12,565/- for the year 1983-84. This penalty was imposed on the ground that the assessee had charged tax at a higher rate than prescribed from its customers. The amount which had become due to be returned because of reduction of rate of tax from 8% to 4% on the confectionery items was adjusted against the penalty so levied.

Not being satisfied with the order so passed by the Assessing Authority, the assessee filed an appeal before the Deputy Commissioner (Appeals) which was allowed vide order dated 4.10.1988 and it was held that the amount of penalty imposed be returned to the assessee in accordance with the rules applicable. Operative portion of the order reads as follows :

“Appeal Sankhya 442/87, 443/87 sweekar ki jati hai aur aaropit arthdand samapt kiya jata hai. Appealkarta dwara yadi yah rashi jama kar di gayi ho to use niyamanusar wapas kiya jaye.”

5. We may record that in the said order itself the Appellate Authority had noticed the case of the assessee that the excess amount of tax which he had realized from his customers has been returned to them by issuing credit notes.

6. The department, not being satisfied with the order of the Appellate Authority, filed an appeal before the Sales Tax Tribunal being Second Appeal No. 190 of 1989. The appeal was dismissed under an order dated 6.4.1989. The department thereafter pursued the matter further by filing a Revision before the High Court being Trade Tax Revision No. 816 of 1999. The revision was also dismissed under an order dated 20.12.2005.

7. After passing of the order by the Appellate Authority dated 4.10.1985, the assessee made an application for refund of amount in terms of the appellate order. This application of the assessee was rejected by the Assessing Authority vide order dated 16.5.1989 and it was held that in view of Section 29(3) of the Trade Tax Act, the money need not be returned to the petitioner-assessee. For the two years in question i.e. 1982-83 and 1983-84. Identical orders were made which are enclosed at page 58 and 60 of the paper book.

8. Not being satisfied with the order so passed, the assessee filed an appeal before the First Appellate Authority which was rejected vide order dated 27.2.1991.

9. Not being satisfied the assessee filed Second Appeal No. 234 of 1991 and No. 235 of 1991 in respect of the aforesaid two years i.e. 1982-83 and 1983-84 before the Tribunal. Both the appeals were allowed vide order dated 7.9.2012. The order under Section 29(3) of the Trade Tax Act as well as the order of the Appellate Authority dated 27.2.1991 were quashed and a direction was issued that the respondents must retur