Article 226 writ remedy barred where statutory appeal exists; pre-deposit discretion must assess hardship and prima facie case.

Writ jurisdiction under Article 226 was held inappropriate for quashing assessment and show-cause proceedings where the assessee had already pursued an efficacious statutory appeal and the notice had merged in the assessment order. The challenge to those proceedings was therefore declined. By contrast, discretion under the proviso to Section 35F had to be exercised on the basis of undue hardship, the assessee's financial position, the amount involved, and whether the appeal disclosed a prima facie arguable case. As those factors were not properly considered, the pre-deposit direction was set aside and the matter remitted for reconsideration in accordance with law.

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Issues: (i) Whether the writ jurisdiction under Article 226 could be invoked to quash the assessment and show-cause proceedings when an efficacious statutory appeal was already filed. (ii) Whether the appellate authority properly exercised discretion under the proviso to Section 35F of the Central Excises and Salt Act, 1944 while directing pre-deposit.

Issue (i): Whether the writ jurisdiction under Article 226 could be invoked to quash the assessment and show-cause proceedings when an efficacious statutory appeal was already filed.

Analysis: The assessment notice had merged in the assessment order, which was already the subject of a statutory appeal. Since the petitioner had availed of the appellate remedy, invocation of writ jurisdiction to set aside those proceedings was not justified. The availability and pursuit of the statutory appeal made the writ remedy inappropriate for that relief.

Conclusion: The prayer to quash the notice and assessment order was rejected.

Issue (ii): Whether the appellate authority properly exercised discretion under the proviso to Section 35F of the Central Excises and Salt Act, 1944 while directing pre-deposit.

Analysis: In considering waiver or reduction of pre-deposit, the authority was required to assess undue hardship, the financial position of the assessee, the amount involved, and whether the appeal disclosed a prima facie arguable case rather than a frivolous one. The impugned order failed to address these material factors in a proper perspective and did not exercise discretion in accordance with law.

Conclusion: The pre-deposit order was quashed and the matter was remitted for reconsideration in accordance with law.

Final Conclusion: The petition succeeded only to the extent that the pre-deposit direction was set aside and reconsideration was ordered, while the challenge to the assessment proceedings was declined.

Ratio Decidendi: Discretion to waive or reduce pre-deposit under the proviso to Section 35F must be exercised by considering undue hardship, financial capacity, the amount involved, and whether the appeal presents a prima facie arguable case.

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