Conditional stay in sales tax appeals modified; recovery stayed and deposit requirement reduced pending disposal.

The conditional stay orders on sales tax assessments were modified because the Central sales tax demand was supported by a challenge based on C forms, justifying protection against recovery pending appeal, and the Kerala sales tax stay condition of depositing 60% of the demand was considered excessive in light of the issues raised. The stay on the Central sales tax demand was made unconditional, the Kerala deposit condition was reduced to a lump sum amount, and recovery of the balance was kept in abeyance until the appeals were decided.

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Issues: Whether the conditional stay orders relating to the sales tax assessments required interference, and what protective relief should operate pending the appeals.

Analysis: The assessment orders under the Kerala General Sales Tax Act, 1963 and the Central Sales Tax Act, 1956 were under appeal. The challenge to the Central sales tax demand was based on the availability of C forms, warranting protection against recovery pending appeal. As regards the Kerala General Sales Tax Act demand, the condition requiring deposit of 60% of the demand was found excessive in view of the factual and legal issues raised in appeal, and the deposit requirement was reduced to a lump sum amount.

Conclusion: The conditional stay orders were interfered with, the stay on the Central sales tax demand was made unconditional, the deposit condition for the Kerala sales tax demand was modified, and recovery of the balance amounts was kept in abeyance pending disposal of the appeals.

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