Sarkaria, J. - (1.) 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 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.
(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.;