Pre-deposit adjustment under KVAT stay provision: earlier appellate payment must be set off against the later 10% requirement.

The amended stay provision under section 60(1A) of the Kerala Value Added Tax Act requires a 10% pre-deposit of the disputed tax, but expressly provides that any amount already remitted under section 55 must be adjusted against that requirement. Where an assessee has already paid 20% at the first appeal stage, that earlier remittance satisfies the statutory minimum for stay of recovery of the balance demand. A further deposit cannot be insisted upon once the adjusted amount meets or exceeds the prescribed pre-deposit, and any conditional order requiring additional payment is inconsistent with the amendment.

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Issues: Whether the pre-deposit already remitted at the stage of the first appeal under section 55 of the Kerala Value Added Tax Act was required to be adjusted towards the 10% pre-deposit contemplated under section 60(1A) of the Kerala Value Added Tax Act, as inserted by section 8(25)(b) of the Kerala Finance Act, 2023, so that no further deposit could be insisted upon for staying recovery of the balance tax demand.

Analysis: The amended provision in section 60(1A) stipulates that where the appellant remits 10% of the disputed tax, recovery of the balance stands stayed till disposal of the appeal. The first proviso expressly directs that any amount already remitted under section 55 shall be adjusted towards the amount payable under the sub-section. Since the petitioner had already remitted 20% at the stage of the first appeal, the amount already paid was more than sufficient to satisfy the statutory pre-deposit requirement under the amended provision. The conditional order insisting on an additional deposit of 10% of the balance demand was therefore inconsistent with the statutory mandate.

Conclusion: The condition requiring further deposit was liable to be set aside, and no additional pre-deposit could be insisted upon if the amount already remitted under section 55 had been made.

Final Conclusion: The petition succeeded on the basis that the earlier pre-deposit had to be given due adjustment under the amended stay provision, with the impugned conditional requirement consequently removed.

Ratio Decidendi: When a statutory amendment provides for adjustment of pre-deposit already made at an earlier appellate stage, the earlier remittance must be set off against the later pre-deposit requirement, and no further deposit can be compelled once the statutory minimum is already satisfied.

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