(1) Notwithstanding anything contained in sub-section (1) and sub-section (2) of section 33 and section 39, but subject to such conditions, as may be deemed fit to be imposed, the State Government may allow the deferment of payment of any existing or future dues payable by an industrial unit under the provisions of this Act or allow payment of such dues in such number of installments as may be specified, if such industrial unit is declared a sick unit in accordance with the guidelines specified in this behalf by an authorised body constituted by the Central Government or the State Government in connection with the rehabilitation of sick industrial units, and is approved for rehabilitation by an approved agency, appointed by the Central Government or the State Government.

(2) Notwithstanding anything contained in section 32, the State Government may set aside an order of assessment or penalty passed ex-parte against a sick unit and direct fresh disposal of the case in accordance with the law for the time being in force.