BHAILAL AND COMPANY Vs. WORKMEN

JUDGEMENT

(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.

(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 :