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of <h1>Court modifies interim stay order, directs stay of 80% disputed amount with deposit conditions</h1> The Court modified the Tribunal's order regarding an interim stay, directing a stay of 80% of the disputed amount with specific conditions for deposit and ... Stay on Demand - Held That:- In view of Neha Trading Company v. Commissioner of Trade Tax U.P. wherein it was held that, mosquito coils are insecticides and therefore chargeable at the rate of 4 per cent only under the U.P. VAT Act, 2008. - stay of 80 per cent of the disputed amount during the pendency of the proceedings before the first Appellate Authority was given. Issues:1. Dispute over the interim stay granted by the Tribunal regarding the demand subject to challenge before the first Appellate Authority.2. Classification of mosquito coils as insecticides under the U.P. VAT Act, 2008.3. Consideration of financial difficulties in granting interim stay when the Assessee has a strong prima facie case based on earlier judgments.4. Assessment of turnover increase due to undisclosed transactions and its impact on the case.5. Interpretation of the law regarding interim stay applications when the Assessee has a strong prima facie case.Issue 1: Dispute over Interim Stay:The Assessee challenged the Tribunal's order granting an interim stay of 80% of the demand subject to challenge before the first Appellate Authority, seeking a stay of the entire disputed amount. The Assessee contended that the goods under adjudication were mosquito coils.Issue 2: Classification of Mosquito Coils:The Assessee relied on a Full Bench judgment of the Tribunal, which classified mosquito coils as insecticides chargeable at a lower rate of 4% under the U.P. VAT Act, 2008. This classification formed the basis of the Assessee's argument for a stay of the entire disputed amount.Issue 3: Financial Difficulties and Prima Facie Case:The Division Bench precedent highlighted that if the Assessee has a strong prima facie case supported by earlier judgments, the issue of financial hardship becomes irrelevant. The Tribunal's failure to consider this legal position in granting the interim stay was noted by the Court.Issue 4: Turnover Increase and Undisclosed Transactions:The Standing Counsel raised concerns about an increase in turnover due to undisclosed transactions, suggesting other issues beyond the tax rate on mosquito coils. However, the Assessee pointed out that the alleged undisclosed transactions resulted in a nominal increase in turnover, less than 0.5% of the total turnover.Issue 5: Interpretation of Law on Interim Stay:The Court reiterated the legal position that when the Assessee has a strong prima facie case, financial hardship should not be a determining factor for granting interim stay. The Court, in line with this principle, modified the Tribunal's order and directed a stay of 80% of the disputed amount with specific conditions for deposit and security.In conclusion, the Court disposed of the revision while emphasizing the importance of adhering to legal principles in granting interim stays and ensuring the interest of substantial justice.
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