BIFR protection against interest demand required examination of the relevant order, leading to remand for fresh adjudication.

Interest demand could not be finally sustained where the assessee claimed protection during its BIFR period under the Sick Industrial Companies (Special Provisions) Act, 1985. Sections 22 and 32 required examination of the relevant BIFR order and supporting records before deciding whether exemption from interest applied. As the order was not examined on the existing record, the matter was remanded for fresh adjudication, with the assessee to be given a reasonable opportunity to produce the necessary material and the adjudicating authority to decide in accordance with law.

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Issues: Whether the demand of interest, in the light of the assessee's BIFR status during the material period, should be sustained or remanded for reconsideration after examining the relevant BIFR order.

Analysis: The assessee was under BIFR during the relevant period under the Sick Industrial Companies (Special Provisions) Act, 1985. The protection available under Sections 22 and 32 of that Act required examination of the BIFR order and the records relied upon for claiming exemption from payment of interest. As the relevant BIFR order was not examined, the demand of interest could not be finally upheld on the existing record, and the assessee was to be given an opportunity to produce the necessary material.

Conclusion: The demand of interest was recalled and the matter was remanded to the adjudicating authority for fresh decision in accordance with law after giving a reasonable opportunity of hearing.

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