Appeal No 2053 of 1971
Appeal by special leave from the Judgment  Order dated the 8th July 1971 of the Bombay High Court in SCA No 134668
M C Bhandare P H Parekh and section Bhandare for the appellant
The Judgment of the Court was delivered by SARKARIA J
Whether the difference of 10 per cent between an Industrial Company and other Companies in the levy of Income tax provided in the Finance Act 1966 is to be construed a rebate or relief in the payment of any direct tax for the development of an industry for the purposes of section 7e of the  for short the Bonus Act is the short question that falls to be answered in this appeal by special leave
The appellant is a Private Ltd Company
it manufactures automobile ancillaries and other goods in its Factory at Bombay
It employs about 170 workmen
The workmen demanded bonus for the year 1964 65
Their demand was not met by the Company
Conciliation proceedings before the Conciliation Officer having failed the dispute was submitted to the Government which by its Order dated May 2 1967 referred the same for adjudication to the Industrial Tribunal
One of the points mooted before the Tribunal was whether in calculating the available surplus the direct tax payable by the Company was deductible at the rate of 55 per cent or 65 per cent
The case of the Mazdoor Saneh Respondent No 1 was that the rate should be 55 per cent as the Company was paying the tax at the rate As against this the Company contended that it was entitled to deduct as per section 7e of the Bonus Act direct tax at the normal rate of 65 per cent and not at 55 per cent which was only a confessional levy amounting to a relief for the purpose of development
The Tribunal accepted the contention of the Company
After referring to the speech of the Finance Minister on the Budget of 196667 the Tribunal held assessed to income tax at the rate of 65 per cent those engaged in industrial undertakings have been assessed at the concessional rate of 55 per cent as a measure of rendering assistance to their growth
Such a concession would unquestionably amount to relief for the purpose of development as contemplated by Section 7e of the Act
 Aggrieved the Mazdoor Sangh impugned the Tribunal s Award dated 29 2 1968 by a Writ Petition under Article 227 of the Con 544 stitution before the High Court of Bombay
The High Court held that the Company being an Industrial Company was liable to pay tax under the Finance Act 1966 at the rate of 55 only on its total income after deducting depreciation
Therefore it could not claim deduction at a rate higher than 55 in calculating the available surplus
In the result the High Court set aside the Award and remitted the case to the Tribunal for further disposal in accordance with law
Hence this appeal by the Company
Broadly the scheme of the Bonus Act is this  At first the gross profits derived by an employer from an establishment are calculated in the manner specified in the First Schedule or the Second Schedule whichever may be applicable section 4
On the basis of such gross profits the available surplus for the particular accounting year is computed
This is done by deducting therefrom the sums referred to in Section 6
According to Clause c of Section 6 one of the sums so deductible is Subject to the provisions of Section 7 any direct tax which the employer is liable to pay for the accounting year in respect of his income profits and gains during that year
Section 7 to which section 6c is subject provides how for the purposes of the Act the direct tax payable by the employer is to be calculated
Clause e of Section 7 is material
It runs thus  no account shall be taken of any rebate other than development rebate or development allowance or credit or relief or deduction not hereinbefore mentioned in section in the payment of any direct tax allowed under any law for the time being in force relating to direct taxes or under the relevant annual Finance Act for the development of any industry
The rates of income tax applicable to Private Ltd Companies tinder Paragraph F Part I of the First Schedule fixed by the Finance Act 1966 are as follows  1
In the case of a domestic CompanyA 1 2 where the Company is not a company in which the public are substantially interested
i in the case of an industrial Company 1 on so much of the total income as does not exceed Rs 1000000 55 per cent
2 on the balance if any of the total income 60 per cent
ii in any other case 65 per cent of the total income
It is not disputed that the Company being an industrial Company with total income for the relevant year not exceeding Rs 1000900 545 the rate of tax under the above Paragaph 1A 2 i applicable to it was 55 per cent and not 65 per cent of the total income
However Mr Bhandare s contention is that this was only a concessional rate and not the normal rate which was prescribed under Clause ii of the above Paragraph 1A 2
The point pressed into argument is that this ten per cent concession in the tax rate was given to Industrial Companies with a view to promote development of Industry and as such must be deemed to be a relief or rebate in the payment of direct tax of the kind contemplated by Section 7e of the Act
Reliance for this contention has been placed on the speech of the Finance Minister on the Budget of 1966 67 wherein he proposed to provide certain reliefs which he considered necessary for providing a suitable climate of growth and in that context described the rate of 55 tax on Industrial Companies as a concessional rate
We are afraid what the Finance Minister said in his speech cannot be imported into this case and used for the construction of Clause e of Section 7
The language of that provision is manifestly clear and unequivocal
It has to be construed as it stands according to its plain grammatical sense without addition or deletion of any words
As a general principle of interpretation where the words of a statute are plain precise and unambiguous the intention of the Legislature is to be gathered from the language of the statute itself and no external evidence such as Parliamentary Debates Reports of the Committees of the Legislature or even the statement made by the Minister on the introduction of a measure or by the framers of the Act is admissible to construe those words
It is only where a statute is not exhaustive or where its language is ambiguous uncertain clouded or susceptible of more than one meaning or shades of meaning that external evidence as to the evils if any which the statute was intended to remedy or of the circumstances which led to the passing of the statute may be looked into for the purpose of ascertain ing the object which the Legislature had in view in using the words in question
In the case before us the language of Section 7e is crystal clear and self contained
It indicates in unmistakable terms that the rebate or relief  in the payment of any direct tax in order to fall within the purview of this clause must satisfy two conditions viz i that it must be a rebate or relief allowed under any law for the time being in force relating to direct taxes or under the relevant annual Finance Act and further ii that it must be a relief or rebate for the development of any Industry
In the present case condition i is lack ing
The Finance Act 1966 does not say that this difference of 10per cent in the rates of tax applicable to an Industrial Company and any other Company is to be deemed to be a rebate or relief for the development of Industry
Nor has it been shown that this difference in the rates is allowed as a rebate or relief under any other extant law relating to direct taxes
546 The High Court was therefore right in holding that it was not permissible to use the speech of the Finance Minister to construe the clear language of the statute
For the forgoing reasons the question posed above is answered in the negative and the appeal is dismissed
As regards the costs the delay in payment of the bonus caused by the pendency of this appeal has been amply compensated vide this Court s order dated February 17 1972 which is to this effect The order of ex parte stay is made absolute on the condition that the petitioner appellant shall pay six percent interest on any amount that is found payable by the appellant to the respondent workmen from the date the award become enforceable till the disposal of the appeal in this Court in case the appeal fails in this Court
 The appeal has been heard ex parte we therefore make no order as to costs
PBR Appeal dismissed


Summary:
Section 7 of the Bonus Act provides as to how the direct tax payable by an employer is to be calculated for the purpose of computing the available surplus
Clause e of section 7 enacts that no account shall be taken of any rebate  or relief  or deduction in the payment of any direct tax allowed under any law for the time being in force relating to direct taxes or under the relevant annual Finance Act for the development of any industry
in the case of an industrial company which is not a company in which public arc substantially interested the Finance Act
1966 fixed the rate of income tax at 55 on so much of the total income as did not exceed Rs ten lakhs on the balance if any of the total income 60 and 65 in the case of any other company
In a dispute between its employees and the appellant which is an industrial company the latter contended that for the purpose of computing the available surplus it was entitled to deduct direct tax at 65 and not 55 which was only a confessional levy amounting to a relief  for the purpose of development
The Tribunal accepted the contention of the appellant
The High Court allowed the respondent s writ petition under article 227 of the Constitution holding that the company being an industrial company could not claim deduction at a rate higher than 55 in calculating the available surplus
On appeal it was contended that the 10 concession in the rate was given to industrial companies with a view to promote development of industry and as such must be deemed to be a relief  or rebate  in be payment of direct tax contemplated by section 7e of the Bonus Act
Reliance for this had been placed on the speech of the Finance Minister on the budget for the year 1966 67
Dismissing the appeal HELD  1 The company being an industrial company with total income not exceeding rupees ten lakhs the rate of tax under paragraph 1A2i of the Finance Act
1966 applicable to it was 55 and not 65 of the total income
544H 545A 2 The rebate or relief  in the payment of any direct tax in order to fall within the purview of section 7e of Bonus Act
must be a rebate or relief allowed under any law for the time being in force relating
to direct taxes or under the relevant Finance Act
for the development of any industry which is one of the conditions to be satisfied
In the present case it did not satisfy this condition
The Finance Act 1966 did not say that this difference of 10 in the rate of tax applicable to an industrial company and any other company is to be deemed to be a rebate or relief for the development of industry
No has it been shown that this difference in the rates is allowed as a rebate or relief under any other extant law relating to direct taxes
545F H 3 a It was not permissible to use the speech of the Finance Minister to construe the clear language of the statute
545C D b As a general principle of interpretation where the words of a statute are plain precise and unambiguous the intention of the Legislature has to be gathered from the language of the statute itself and no external evidence such as Parliamentary debate  Reports of the Committees of the Legislature or even the statement made by the Minister on the introduction of a measure or by the framers of the Act is admissible to construe those words
It is only where a statute is not exhaustive or where its language is ambiguous uncertain clouded or susceptible of more 543 than one meaning or shades of meaning that external evidence as to the evils
if any
which the statute was intended to remedy
or of the circumstances which led to the passing of the statute may be looked into for the purpose of ascertain ing the object which the Legislature had in view in using the words in question
545D F