Statutory canteen welfare for factory workers supports fiscal eligibility where the service is integral to manufacturing compliance.

Canteen service provided to factory workers is treated as a statutory labour welfare obligation under the Factories Act, 1948. Where the employer is required to maintain such a facility and it is intimately connected with manufacturing activity, the fiscal statute cannot be applied to deny the benefit merely because the service supports welfare compliance. The service was therefore regarded as eligible in the stated circumstances, with the welfare mandate prevailing over a restrictive tax treatment.

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Issues: Whether the canteen service provided to factory workers, being a statutory obligation under the Factories Act, could be denied fiscal benefit on the ground that the welfare obligation had an intimate connection with manufacture.

Analysis: Provision of canteen service to factory workers is a statutory requirement under section 46 of the Factories Act, 1948. When labour welfare legislation obliges the employer to provide such a facility, and the facility is intimately connected with manufacturing activity, the fiscal statute cannot override that welfare obligation.

Conclusion: The issue is answered in favour of the assessee. The canteen service was treated as eligible in the circumstances.

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