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Issues:
1. Dispute over VAT amount paid by a State Government undertaking. 2. Applicability of Service Tax on transactions. 3. Maintainability of writ petitions. 4. Interpretation of Supreme Court judgment on VAT liability and conditional interim orders. Analysis: 1. The appellant, a State Government undertaking, disputed the VAT amount paid and argued that no direction to deposit 50% of the demanded VAT amount is necessary pending Writ Petitions. The appellant contended that the disputed amount related to transactions subject to Service Tax. 2. The Government Advocate cited previous Division Bench judgments where directions were issued to collect both Service Tax and VAT. It was argued that based on these precedents, the writ petitions filed by the appellant were not maintainable. 3. The appellant's Counsel relied on a Supreme Court judgment involving Bharat Petroleum Corp. Ltd. The Counsel argued that as a State Government undertaking regularly paying VAT, there was no need for a conditional interim order to deposit 50% of the VAT amount demanded by the respondents. 4. Referring to the Supreme Court case, the Court noted that the Apex Court did not interfere with the interim order related to tax levy due to peculiar circumstances. The Court observed that in cases involving public sector companies with substantial financial standing, imposing a condition to deposit 50% of the tax demanded for enjoying an interim order may not be justified. Consequently, the Court modified the interim order, directing the appellant and revenue to seek permission to hear the matter on merits promptly. 5. Ultimately, the Court disposed of the appeals, emphasizing that there was no justification to impose a 50% deposit condition on the appellant, a substantial company in good financial standing. The Court upheld the grant of the interim order of stay and instructed the parties to proceed to the Single Judge for a timely hearing on the merits of the case.
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