Case: Anandji Haridas &amp; Co. Pvt. Ltd Vs. Engineering Mazdoor Sangh &amp; Anr

2. 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 196-465. 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.3. 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 Sangh (Respondent No. l) was that the rate should be 55 per cent as the Company was paying the tax at that rate only. As against this, the Company contended that it was entitled to deduct as per Section 7 (e) of the Bonus Act, direct tax at the normal rate of 65 per cent and not at 55 per cent which was only concessional levy amounting to a relief for the purpose of development.4. The Tribunal accepted the contention of the Company. After referring to the speech of the Finance Minister on the Budget of 1966-67, the Tribunal held:".........while the private companies have been normally 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 7 (e) of the Act."Aggrieved, the Mazdoor Sangh impugned the Tribunals Award, dated 29-2-1968, by a Writ Petition under Article 227 of the Constitution before the High Court of Bombay. The High Court held that the Company being an Industrial Company, was liable to pay tax underthe Finance Act, 1966 at the rate of 55% only on its total income after deduction 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.

Court's reasoning:
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.In the case before us, the language of Section 7 (e) 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 most 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 lacking.11. The Finance Act, 1966, does not say that this difference of 10 per 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.12. 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.As regards the costs, the delay in payment of the bonus caused by the pendency of this appeal has been amply compensated vice this, Courts 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 per cent 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."