BHARGAVA, J. - (1.) AN industrial dispute between two firms, M/s. Bhailal Raichand and Co., and M/s. Bhailal & Co., and their workmen was referred to the Industrial Tribunal, Maharashtra, Bombay by the State Government for adjudication under S. 19(1)(d) of the Industrial Disputes Act by a notification dated 1st October, 1963. The firms raised some preliminary objections, one of which related to the question whether there could be one single reference in respect of the two firms. These preliminary objections were rejected by the Tribunal and need not detain us, because the decision of the Tribunal on these preliminary objections has not been challenged before us.
(2.) THE reference related to four demands made by the workmen relating to gratuity, bonus, casual leave and reinstatement of one workmen, Manek Subedar Khopodo. The two firms, which are appellants in this appeal, sought special leave to appeal against the award in respect of only two items of gratuity and bonus, and this appeal has been filed on the basis of leave granted in respect of these two points. In this appeal, therefore, we are concerned with the correctness of the award on these two items of reference only. In the appeal, despite service, appearance has not been put in one behalf of the workmen, so that the appeal has been heard ex parte. Learned counsel appearing for the appellants first took up the appeal relating to the grant of bonus by the Tribunal and, in the behalf, raised two points before us. One was that the Tribunal, in calculating the surplus available for working out bonus, committed the error of making no deduction respect of the remuneration of the working partner of the firms. The second ground was that, in that calculation, the Tribunal wrongly failed to deduct the prior charge of income-tax. So far as the first point is concerned, we find from the pleadings put forward before the Tribunal, as well as from the award, that the appellants did not at any stage claim before the Tribunal that, in calculation of surplus, any deduction could be made in respect of remuneration of the working partner. In fact, there was no claim at all in respect of partner's remuneration. The legitimate claim of return on capital in vested by the partners was accepted by the Tribunal. In these circumstances, we could not permit the appellants to raise this point in this appeal under Art. 136 of the Constitution before us for the first time.
(3.) THE grievance with regard to non-deduction of income-tax in calculation of surplus appears to be justified. At the initial stage, learned counsel for the appellants claimed that income-tax should have been deducted at 50% of the net profits as calculated in the Profit & Loss Account, because income-tax is deducted on a national basis and tax at 50% is charged from companies. This claim on the face of it was incorrect, because the appellants are not a company registered under the Companies Act. They constitute partnerships, and even the notional tax payable by a partnership cannot be equated with the tax payable by a company incorporated under the Indian Companies Act. In Messrs. Tulsidas Khimji v. Their Workmen, (1963) 1 S.C.R. 675, this Court considered the principles that apply to deduction in respect of income-tax in calculating surplus available in accordance with the Full Bench Formula approved by this Court in the case of Associated Cement Companies Ltd., Dwaraka Cement Works, Dwarka v. Its Workmen (1959) S.C.R. 925, In the case of a partnership firm the Court rejected the contention that deduction should be on the same basis as in the case of a company by holding : "In our opinion, it would not be right to equate a registered firm to a company for the purpose of deduction of income-tax It is true that the income-tax deduction has to be made on a national basis, as laid down by a Bench of 5 Judges in this Court in Associated Cement Companies Ltd., Dwaraka Cement Works, Dwaraka v. Its Workmen (supra). But even so, the national basis must have relevance to the law of income-tax in respect of firms." Thus the first contention raised on behalf of the appellants that the Tribunal in the present case should have permitted deduction of income-tax on the national basis of 50% is negative by that decision of this Court.;