Court Modifies Stay Order, Petitioner to Pay 20% Tax in Installments

The court modified the condition imposed in the stay order, directing the petitioner to pay Rs. 2,93,81,208 (20% of the disputed tax) in six installments, in accordance with the proviso to Section 55(4) of the KVAT Act. The court emphasized the need for the appellate authority to expedite the appeal's disposal, granting the relief sought by the petitioner in the review petition.

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Issues:
1. Review of condition imposed in stay order
2. Interpretation of proviso to Section 55(4) of KVAT Act
3. Quantum of pre-deposit before appellate authority

Issue 1: Review of condition imposed in stay order
The petitioner sought a review of the condition in the stay order, arguing that it was more onerous than what was mandated under the proviso to Section 55(4) of the KVAT Act. The petitioner contended that the condition should be based on the disputed tax amount rather than the existing demand, which includes interest. The government pleader quantified the amount to be paid by the petitioner as Rs. 2,93,81,208, which was agreed upon by the petitioner's counsel.

Issue 2: Interpretation of proviso to Section 55(4) of KVAT Act
The petitioner argued that the condition imposed by the appellate authority did not strictly adhere to the proviso to Section 55(4) of the KVAT Act. The petitioner emphasized that the pre-deposit should be calculated based on the disputed tax amount alone, excluding any additional charges like interest. The court considered this argument and modified the condition, directing the petitioner to pay Rs. 2,93,81,208 (20% of the disputed tax) in six installments.

Issue 3: Quantum of pre-deposit before appellate authority
The court, after considering the arguments presented, modified the earlier judgment and clarified that the petitioner must pay Rs. 2,93,81,208 (20% of the disputed tax) in six installments. The court emphasized the need for the appellate authority to expedite the disposal of the appeal. The review petition was disposed of accordingly, providing the relief sought by the petitioner regarding the modification of the condition imposed in the stay order.

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