Interim stay against VAT recovery granted subject to partial deposit and security pending hearing on input tax credit issues.

The HC admitted the appeal on substantial questions of law concerning input tax credit under the U.P. VAT Act, 2008 and the legality of enhancing turnover based on the difference between sale price and purchase price. It did not decide the merits of those tax issues at this stage. Instead, it granted interim protection against recovery of the disputed demand, subject to deposit of 50% of the amount within the stipulated time and furnishing security for the balance to the satisfaction of the assessing authority.

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Issues: Interim stay of recovery pending disposal of the admitted matter; the appeal was admitted on substantial questions of law, including the scope of input tax credit under the U.P. VAT Act, 2008 and the legality of enhancing turnover on account of a difference between sale price and purchase price.

Analysis: The order does not decide the merits of the substantial questions framed. It only admits the matter for further hearing and grants protective interim relief against realisation of the impugned demand. The stay is conditional upon deposit of 50% of the disputed amount within the stipulated time and furnishing security for the balance to the satisfaction of the assessing authority.

Conclusion: No final adjudication on the tax issues was made at this stage; only interim protection against recovery was granted subject to conditions.

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