Conditional interim relief in entry tax challenge: blanket stay refused, but stay granted with deposit and bank guarantee terms.

A challenge to the constitutional validity of the U.P. Tax on Entry of Goods into Local Areas Act, 2007 sought a blanket stay of the impugned judgment and recovery demands. The Court declined unconditional interim protection, but granted conditional stay of the judgment's operation by requiring deposit of 50% of the accrued tax liability or arrears, after adjusting amounts already paid, together with a bank guarantee for the balance. The same safeguard was extended to future demand notices, and the appellant was left free to pursue statutory remedies against assessment and related orders.

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Issues: Whether the appellant was entitled to a blanket stay of the impugned judgment and demand recovery under the U.P. Tax on Entry of Goods into Local Areas Act, 2007, and if not, what interim protection could be granted pending the appeal.

Analysis: The appeal arose from challenge to the constitutional validity of the levy and the interim prayer sought complete stay of the High Court's judgment. The Court declined to grant an unconditional stay, but balanced the competing interests by protecting the appellant through conditional interim relief. The order required deposit of fifty per cent of the accrued tax liability or arrears, after adjusting amounts already paid, together with bank guarantee for the balance, and extended the same safeguard to future demand notices. The appellant was also permitted to pursue statutory remedies against assessment and related orders.

Conclusion: The request for blanket stay was rejected, but conditional interim relief was granted in favour of the appellant by staying the operation of the impugned judgment subject to deposit and bank guarantee requirements.

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