Sick industrial company protection under SICA bars pre-deposit for past excise dues, but not current tax liability.

Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 protects a sick industrial company from coercive recovery in respect of dues arising before registration of its reference before the BIFR. That protection extends to the impugned pre-deposit requirement for past excise duty demands, making such insistence unsustainable. The protection does not, however, exempt the company from paying current excise duty accruing after registration of the reference. The Gujarat High Court therefore quashed the pre-deposit order and directed that the appeals be heard without pre-deposit, while the company remained liable for current statutory dues.

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Issues: Whether the petitioner, a sick industrial company, was entitled to protection under Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 against a pre-deposit order relating to excise duty dues for the period prior to registration of its reference before the BIFR, and whether such protection extended to current excise duty liability.

Analysis: The demand covered by the impugned pre-deposit order related to the period before registration of the reference as a sick industrial company. Protection under Section 22(1) applied to such past dues, but it did not absolve the company from paying current excise duty arising after registration of the reference. The Tribunal's direction to insist upon pre-deposit for the past-period demand was therefore unsustainable.

Conclusion: The petitioner was entitled to relief against the pre-deposit requirement for the past-period excise demand, while remaining liable to continue paying current excise duty for the post-registration period.

Final Conclusion: The impugned pre-deposit order was quashed and the appeals were directed to be heard without pre-deposit, subject to continued payment of current excise duty for the later period.

Ratio Decidendi: Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 protects a sick industrial company from coercive recovery for pre-registration dues, but not from liability to pay current statutory taxes arising after registration of the reference.

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