TaxTMI 
TaxTMI 
1975 (2) TMI 50
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....try for the purposes of section 7(e) of the Payment of Bonus Act, 1965 (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 limited 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....
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....culating 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: "(c) subject to the provisions of section 7, any ....
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....not exceeding Rs. 10,00,000, the rate of tax under the above Paragraph I(A)(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 I(A)(2). The point pressed into argument is that this 10 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 7(e) of the Act. Reliance for this contention has been placed on the speech of the Finance Minister on the Budget for 1966-67, wh....
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.... 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 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 lacking. The Finance Act, 1966, does not say that this difference of 10 percent, 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 i....