Conditional stay in tax dispute modified as revenue-neutral mistake justified unconditional interim protection.

The conditional interim stay requiring deposit of 10% of the disputed tax was modified because the dispute arose from a mistaken claim of input tax credit in IGST instead of CGST and WBGST, and the matter was treated as revenue neutral with no loss to the State. On those facts, the deposit condition was found unnecessary, and the impugned orders in the writ petition were stayed without any condition. The appellants were accordingly exempted from depositing the disputed amount, and the stay was continued until disposal of the writ petition.

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Issues: Whether the conditional stay imposed by the Single Bench requiring deposit of 10% of the disputed tax amount should be modified, and whether unconditional stay of the impugned orders was warranted on the facts of the case.

Analysis: The appeal concerned an interim order in which the Single Bench had granted stay subject to payment of 10% of the balance tax in dispute. The appellants asserted that the credit entry arose from a mistaken claim of input tax credit in IGST instead of CGST and WBGST, and that the matter was revenue neutral with no loss to the State. In view of these peculiar facts, the condition imposed for stay was found unnecessary.

Conclusion: The conditional stay was modified, the impugned orders in the writ petition were stayed without any condition, and the appellants were exempted from depositing 10% of the disputed tax amount.

Final Conclusion: The interim relief was expanded in favour of the appellants by removing the deposit condition and continuing stay of the impugned orders until disposal of the writ petition.

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