LexBENGAL KAGAZKAL MAZDOOR UNION & ANOTHER versus THE TITAGHUR PAPER MILLS CO. LTD.
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1963 Alril 11. 38 SUPREME COURT REPORTS [1964] VOL. BENGAL KAG"AZKAL MAZDOOR UNJON & ANOTHER v. THE TITAGHUR PAPER MILLS CO. LTD. (P. B. GAJENDRAGADKAR, K. N. WANCHOO and ..... K. c. DAS GUPTA JJ.) - Indu•trial Disputt-Bonus-Oomputation-Gross Profit•- [ ncome-tax-W orking c<u>ital-Rthabilitation. An industrial dispute having arisen between the appellants and the respondents, the Government of West Bengal referred the dispute to the Second Industrial Tribunal, West Bengal, for determining the question of bonus for each of the four years (from 1955 to 1959) and the method of its dhtribution amongst different categories of workmen including temporary hands. The tribunal on ei<amination of the evidence applying the Full Bench Formula came to the conclusion that there was no surplus in any ot the four years for the.grant of bClnus and therefore rejected the claim. The appellants thereupon appea- led to this Court with special leave. The Tribunal's Award was impugned by the appellants on four grounds, namely, the tribunal went wrong in calculating (a) gross profits for the years 1956-57 (b) income-tax for all the four years (c) working capital for all the four years and (d) rehabilitation for all the four years. · Held that if there had been any addition to the profit on account of an increase in the value of the stock that would be an extraneous profit for which no credit could be claimed by the workmen and such extraneous profit could not be taken into account in calculating the available surplus. But in that case the result of the reavaluation was not that increased value wa.!l taken into account in. the matter of consurnption Of raw materials. The Tribunal overlooked this fact in applying the ratio of that ca•e to the facts to the present case. Tata Oil Mills .Go. Ltd., v. Its Workmen, [1960] I S.C.R. I, explained. If the stc-cks are revalued that is no reason far ::1ho\\•ing \he relevant cost on the debil side a• consumption 1 for in reality - -..... - 3 S.C.R. SUPREME COURT REPORTS 39 the revalued price is not what the mills paid for the raw materials etc. consumed and therefore to get a correct picture of the actual profit made it is only the original cost price which will have to be taken into account for that purpose. On sale of paper, the profit must be on the original valuation of paper stock and not on the revalued figure. Held further, that at p. 962 of the decision of this Court in The Associated Cement Companies Ltd. v. Its Workmen, [1959] S.C.R. 925, the word "not" has been printed by mistake and what the court then decided was that in calculating ,,.... the amount of tax payable the Tribunal should take into accou- nt the concession given by the Income-Tax Act. The Tribunal was wrong in calculating the income tax after deducting the notional normal depreciation and not the statutory depre- ciation. Sree Meenakshi Mills Ltd. v. Their Workmen [1958] S.C.R. 878, referred to. Held further that it is well settled that a balance shert cannot be taken as proof of a claim as to what portion of reserves has actually betn used as working capital and that the utilization of a portion of reserves as working capital hag to be proved by the employer by evidence ,on affidavit or otherwise after giving opportunity to the workmen to contest the correc- tness of such evidence by cross-examination. In the present case no acceptable proof has been given and the method of proof was not proper. Petled Turkey Red Dye Works Lia. v. Dye and Chemical IVork•rs Union, [1960] 2 S.C.R. 906, refered to. Held further, that the question whether investmcr ts have been actualiy used as working capital is a question of fact and it has to be proved by proper evidence. In the present case the Tribunal was wrong in assuming that all investments have been used as working capital without any evidence to >Upport this assumption. Where advances have been given for obtaining re.w materials etc. they would certainly be part of the amount used as working capital. But where advances are purely loans and where advances have not been made for the purpose of the business such advances cannot be taken to have been used as working capital. Held further that the determination of rehabilitatiu'1 is a Jon!l term affair and once it has been determined it cannot go 1965 B1111al lr111ozkal Mav/ffrUniGn •• Titathu' Pa/Jer Mil/! Co. Ltd. I9i3 .aent•l Kag•zk•l M •zJ1Dr Uni•
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