The Calcutta High Court has reaffirmed that the pre-deposit requirement under Section 35F is mandatory for the maintainability of appeals and cannot be waived merely on account of business losses or asserted inability to pay. The Court underscores that financial hardship does not per se qualify as grounds for relaxation unless statutory exemptions or insolvency are established, thus reinforcing the prevailing doctrine as binding authority for all subordinate courts.
Summary
| Category | Data |
|---|---|
| Case Name | MAT/1441/2025 of MANSAROVAR FERROUS PRIVATE LIMITED Vs REGISTRAR, CESTAT AND ORS. |
| CNR | WBCHCA0412842025 |
| Date of Registration | 28-08-2025 |
| Decision Date | 28-10-2025 |
| Disposal Nature | DISMISSED |
| Judgment Author | HON’BLE JUSTICE DEBANGSU BASAK |
| Concurring or Dissenting Judges | HON’BLE JUSTICE MD. SHABBAR RASHIDI (Concurring) |
| Court | Calcutta High Court |
| Bench | Division Bench: HON’BLE JUSTICE DEBANGSU BASAK, HON’BLE JUSTICE MD. SHABBAR RASHIDI |
| Precedent Value | Binding on subordinate courts within the Calcutta jurisdiction |
| Type of Law | Central Excise/Indirect Taxation – Appellate Procedure |
| Questions of Law | Whether pre-deposit under Section 35F of the Central Excise Act, 1944, is mandatory or can be waived on grounds of financial hardship. |
| Ratio Decidendi |
The Court concluded that Section 35F of the Central Excise Act, 1944 clearly mandates pre-deposit as a prerequisite for entertaining appeals and does not confer discretion to waive on grounds including business losses, unless the appellant is declared insolvent or is subject to insolvency proceedings. The requirement is not considered onerous or burdensome as per established law. Reliance on mere business losses or financial statements is insufficient for waiver. No exceptional factual circumstances justifying waiver were demonstrated. The Division Bench upheld the learned Single Judge’s order dismissing the writ petition seeking relaxation. |
| Judgments Relied Upon | The Single Judge considered two authorities cited before it (not detailed in the Division Bench judgment). |
| Logic / Jurisprudence / Authorities Relied Upon by the Court | The explicit language of Section 35F; absence of statutory exemption for pre-deposit except for insolvency/indigency. |
| Facts as Summarised by the Court | The appellant company sought to file an appeal before the Tribunal without the statutory pre-deposit, citing ongoing business losses. The company was neither declared insolvent nor subject to insolvency proceedings. The writ petition for waiver of the pre-deposit was dismissed by the Single Judge, and this order was appealed. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within the Calcutta High Court’s jurisdiction |
| Persuasive For | Other High Courts and Tribunals dealing with Section 35F of the Central Excise Act |
| Follows | The explicit language of Section 35F as interpreted by prior authorities (not detailed) |
What’s New / What Lawyers Should Note
- The Division Bench affirms that inability to pay, as reflected in business losses or financial statements, is not adequate to secure waiver of pre-deposit under Section 35F.
- Only statutorily recognized exceptions (such as declared insolvency or ongoing insolvency proceedings) may justify non-compliance with the pre-deposit requirement.
- Lawyers representing appellants should ensure clients have either complied with pre-deposit or can demonstrate insolvency as recognized by law to avoid dismissal at the threshold.
- Arguments based on hardship or balance sheet losses are insufficient unless backed by legal insolvency or statutory exemption.
Summary of Legal Reasoning
- The Court began by identifying that Section 35F of the Central Excise Act, 1944 is “explicit” in requiring the prescribed pre-deposit before appeals can be entertained by the Tribunal or the Commissioner (Appeals).
- The Bench acknowledged arguments regarding financial hardship but was unconvinced by evidence of business losses, emphasizing that the company was not declared insolvent nor were insolvency proceedings pending.
- The judgment follows the trite law that the pre-deposit requirement, as legislated, is neither onerous nor arbitrary, but forms a mandatory statutory prerequisite.
- The Division Bench noted that the learned Single Judge had already considered the statutory language and authorities before dismissing the writ petition.
- The Division Bench found no exceptional grounds justifying interference with the order impugned, thereby upholding the mandatory character of Section 35F without carving out an exception based on mere financial hardship.
Arguments by the Parties
Petitioner
- The appellant is not in a position to make the pre-deposit for preferring the appeal.
- Argued that making pre-deposit is not a condition precedent for filing appeal in every case.
- Relied on Income Tax Returns and Balance Sheet to show business losses and inability to pay.
- Submitted that in deserving cases, the pre-deposit requirement can be waived.
Respondent
- Emphasized that Section 35F requires pre-deposit as a mandatory prerequisite to entertaining appeals.
- Pointed out that nothing was placed before the court to show the appellant is indigent or undergoing insolvency proceedings.
- Asserted that business losses alone are inadequate grounds for waiver under prevailing law.
Factual Background
The appellant, a company engaged in business, sought to prefer an appeal before the Tribunal under Section 35F of the Central Excise Act, 1944, but could not deposit the required statutory pre-deposit. The company attributed its inability to business losses as reflected in its financial statements. The writ petition before the Single Judge for waiver of the pre-deposit was dismissed. This dismissal was then challenged before the Division Bench by way of appeal.
Statutory Analysis
- Section 35F of the Central Excise Act, 1944 was interpreted as unambiguously requiring a pre-deposit of the prescribed amount before the Tribunal or Commissioner (Appeals) may entertain an appeal.
- No scope was found within the provision for judicial waiver of the pre-deposit requirement on grounds of hardship or business losses, save in cases of insolvency or indigency, which were not established by the appellant.
Dissenting / Concurring Opinion Summary
- HON’BLE JUSTICE MD. SHABBAR RASHIDI expressly concurred with the reasoning and conclusion of HON’BLE JUSTICE DEBANGSU BASAK.
- No dissenting or separate nuanced reasoning was offered.
Procedural Innovations
- The court dealt with and allowed an application for condonation of delay prior to addressing the merits, reiterating that condonation of delay for the ends of justice is available upon sufficient cause shown.
- No new procedural precedent or innovation on maintainability or evidence instructions was set.
Alert Indicators
- ✔ Precedent Followed – When existing law is affirmed.