Pre-deposit discretion under Section 35F must be properly exercised before dismissing an appeal without merits review.

Section 35F pre-deposit requirements were applied to dismiss an appeal at the threshold when the full demanded amount was not deposited, but the provision also allowed waiver or reduction on sufficient cause. Because the appellate authority did not properly exercise that discretion, and the appellant was a public sector undertaking, rejection without consideration of the merits was unsustainable. The appeal was therefore restored for fresh hearing on merits without insisting on pre-deposit, with reasonable opportunity of hearing before the Commissioner (Appeals).

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Issues: Whether the dismissal of the appeal by the Commissioner (Appeals) for non-compliance with the pre-deposit requirement under Section 35F was justified, and whether the appellate authority ought to have exercised discretion to waive or reduce the pre-deposit and decide the appeal on merits.

Analysis: The appeal was rejected at the threshold because the appellant did not deposit the entire amount demanded, and the merits were not examined. Section 35F contemplates pre-deposit, but also vests discretion in the appellate authority to waive the whole or part of the deposit on sufficient cause. The appellant was a public sector undertaking, and the order showed that the authority did not properly exercise that discretion before dismissing the appeal. In these circumstances, the rejection without consideration of merits was unsustainable.

Conclusion: The dismissal for non-compliance with pre-deposit was set aside and the appeal was directed to be restored and heard on merits without insisting on pre-deposit.

Final Conclusion: The matter was sent back for fresh consideration by the Commissioner (Appeals), who was required to hear the appeal on merits after granting a reasonable opportunity of hearing.

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