Jaikamal Paints vs The Collector of Central Excise and Another

Bakthavatsalam, J.—After hearing Mr. Natarajan, learned Counsel for the petitioner and Mr. Jayahandaran, who has taken notice on behalf

of the Department, I am of the view that the impugned order has got to be set aside on the ground that the respondent has not correctly applied the

term ""undue hardship"" which occurs in the proviso to Section 35-A of the Central Excises and Salt Act, 1944. From the narration made in para 10

of the affidavit it is clear that the capital itself comes to only about Rs. 6,00,000/- by March, 1990 and to ask such a Small Scale Industry to pay

Rs. 3,00,000/-, as pre-deposit, I am of the view, surely, there will be undue hardship on the part of the petitioner. Learned Counsel referred to an

order of the Supreme Court in an Application No. 332 of 1984 in appeal No. 693 of 1984 wherein the Supreme Court has held that the

expression ""undue hardship"" as provided by Act 1944 would include consideration inter alia the aspect of liquidity possessed by the assessee. If

this is considered I think the impugned order has got to be set aside, and accordingly it is set aside. However, considering the facts and

circumstances on condition the petitioner deposits an amount of Rs. 1,00,000 within 8 weeks from today, the respondent is directed to take up the

appeal on file and pass orders on merits according to law. The writ petition is ordered accordingly. No costs.