the problem is that both blocks of code will run.
in the first block you check if Enter has been pressed, then set paused to true.
the next block checks if Enter has been pressed AND if paused is true (which it will be because you just set it to true) and then it will un-pause your game.
You should use ELSE to make sure both blocks don't run.
EVENT: On Press Enter
> is paused - set paused false, set timescale 1
> ELSE - set paused true, set timescale 0
then I would expect a global variable would work fine...