Pre-deposit relief for a BIFR sick company was limited to 25%, balancing statutory compliance and financial hardship.

In excise duty and penalty appeals, the HC held that full pre-deposit under section 35F need not be insisted upon where the assessee was a sick company before the BIFR and strict compliance would likely cause serious hardship and irreparable injury. Balancing the statutory pre-deposit requirement against the assessee's financial , the Court limited relief instead of granting a complete waiver. The pre-deposit condition was modified to 25% of the assessed amount, to be deposited within three weeks, after which the appeals were to be heard on merits; any dismissal for non-compliance was directed to be restored.

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Issues: Whether, in proceedings arising from excise duty and penalty appeals, the requirement of full pre-deposit under section 35F should be waived or substantially modified in view of the assessee being a sick company before the BIFR.

Analysis: The appellate authority had refused complete waiver and directed deposit of the entire amount, but the Court found that insisting on full pre-deposit from a company declared sick by the BIFR was likely to create serious complications and cause irreparable injury. In the circumstances, the relief sought deserved to be granted only to a limited extent, balancing the requirement of pre-deposit with the financial condition of the assessee.

Conclusion: The pre-deposit condition was modified and the assessee was required to deposit 25% of the assessed amount within three weeks, whereupon the appeals would be heard on merits; any dismissal for non-compliance was directed to be restored.

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