# J 'L'HE INDOHE IRON AND 8'fEEL REGISTERED STOCK-HOLDERS' ASSOCIATION v. THE STATE OF MADHYA PRADESH AND OTHERS

- **Citation:** [1962] 2 S.C.R. 924
- **Court:** Supreme Court of India
- **Decided:** 1962
- **Bench:** P. B. GAJENDRA<fADKAR, K. SUllBA RAO, M. Hidayatullah, J.C. Shah, Raghubar Dayal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/j-l-he-indohe-iron-and-8-feel-registered-stock-holders-association-v-the-state-2307
- **Pages:** 11

## Headnote

Satea Tax-Commodity declared essential for tke lif< of
community-Impo,gition of tax by State Government under prior
enactment-Constitutional validity-Constitution
of
India,
Art. 286 (3)-J:ssential Goode (Declaration 'Jm,d Reyulation of
Tax "" Sa/, "'' Purchase) Act, 1952, ss.2, 3 Madhya Bharat
Bales Tax Act, Samt-at 2007, s. 5( 2).
The constituent members of the appellant Association,
\Vho carried on business in iron and steel articles were assessed
to sales tax for the years 1953-.54 and 1954-.55 under a notification dated October 24, 1953, issued by the State of Madhya
Bharat under s. 5(2) of the Madhya Bharat Sales Tax Act,
Samvat 2007, (Act No. 30 of 1950). The appellant moved the
High Court under Art. 226 of the Constitution challenging the
validity of the assessment on the ground that the said articles
were covered by the declaration made by Parliament by s. 2
of the Essential Guods (Declaration and Regulation of Tax on
Sale or Purchase) Act, 1952, that iron and steel were essential
<ommoditics within tlie meaning of Art. 286(3) of the Constitution which was operative from August 9, 1952. The High
Court found against the appellant.
Held that even asswning that the words "iron and steel"
in Entry 14 of the Schedule to the Act were comprehensive
enough to include articles made of iron and steel, that would
not necessarily render the uotification invalid under Art. 286(3}
of the Constitution.
Article 286( 3) as it stood before the Constitution (Sixth
Amendment} Act, i'956, could be succe,sfully. invoked onlr if
three conditions were satisfied,--( I) that the impugned leg1Sla·
tion wa!i une by the Legisld.turc of a State, 1.:onstitutt:d un?er
the Uons\itution, .(2) that it was subsequ~nt to the declaration
made by the Parliament as to the essential character of the
commodity and ( 3) that it could be, but wa; not, reserved
for the President's comideration and assent.
It wa:; obvious, therefore, that a subsequent Parliamentary
I
2 S.C.R.
SUPREME COURT REPORTS
925
declaration could not affect the validity of an enactment
retrospectively.
Sardar Soma Singh v. The State of Pepsu and Union of
India, (1954) S. C.R. 955 and Firm of A. Gowri•hankar
v. Sales Tax Ufficer, Secunderabad, A. I. R. 1958 S. C. 883,
referred to.
Although the Act, under which the impugned notllication
was made, satisfied the first condition, it did not satisfy the
second or the third and, mnsequently, its validity could not
be questioned unde1 Art. 286(3) of the Constitution,
Held, further, that it was apparent from s. 3 of the
Essential Goods (Declaration and Regulation of Tax on Sale
or Purchase) Act, 1952, that if a law had been passed prior
to the commencement of the Act authorising the imposition
of a tax, itS'validity could not be challenged on the ground
that the said commodity was subsequently declared by the Act
to be essential for the life of the community. The. impugned
notification and the State Act under which it was made were,
therefore, outside the purview of s. 3 of the Act.
C1vn, APPELLATE JURISDICTION: Civil ApPeals
Nos. 509 and 510 of 1960.
Appeals by special leave from the judgmellt
and order dated October 26, 1956, of the former
Madhya Bharat High Court Indore, in Ci·;i! Misc.
Cases Nos; 26 of 54 and 48 of 55.
A. V. Viswanatlta Sastri, C. B. Agarwala and
A. G. Ratnaparkhi, for the appellants.
R. J, Bhave and I. N. Shroff, for the respon·
dents.
1961. July 26.
The Judgment of the Court
was delivered by
1961
The Indore Iran
aiui Stul
Registered Stocf,,,
holrler1' ,48111.
v.
The State of
Madhya Prarleak
GAJENDRAGADKAR, J.-The appellant,
the Gajend1agaiikar
Indore Iron and Steel Registered Stock.holders'
J.
Association (Private) Ltd., is a registered Association whose constituent members carry on bu8ine8s
generally in fabricated iron and steel material and
more partic~larly in iron sheets, plain or corrugated,
b~rs, ro~s, hght an~ heavy structurals, nail8, joints,
wire nails and ftll kmds and v~rieties of wires and
1961
The Indore lroro
and

## Text

19'61
July Zli
924
SUPREME COURT REPORTS
[1962J
'L'HE INDOHE IRON AND 8'fEEL REGISTERED
STOCK-HOLDERS' ASSOCIATION
v.
THE STATE OF MADHYA PRADESH
AND OTHERS
(P. B. GAJENDRA<fADKAR, K. SUllBA RAO,
M. HIDAYATULLAH, J.C. SHAH and
RAGHUBAR DAYAL, JJ.)
Satea Tax-Commodity declared essential for tke lif< of
community-Impo,gition of tax by State Government under prior
enactment-Constitutional validity-Constitution
of
India,
Art. 286 (3)-J:ssential Goode (Declaration 'Jm,d Reyulation of
Tax "" Sa/, "'' Purchase) Act, 1952, ss.2, 3 Madhya Bharat
Bales Tax Act, Samt-at 2007, s. 5( 2).
The constituent members of the appellant Association,
\Vho carried on business in iron and steel articles were assessed
to sales tax for the years 1953-.54 and 1954-.55 under a notification dated October 24, 1953, issued by the State of Madhya
Bharat under s. 5(2) of the Madhya Bharat Sales Tax Act,
Samvat 2007, (Act No. 30 of 1950). The appellant moved the
High Court under Art. 226 of the Constitution challenging the
validity of the assessment on the ground that the said articles
were covered by the declaration made by Parliament by s. 2
of the Essential Guods (Declaration and Regulation of Tax on
Sale or Purchase) Act, 1952, that iron and steel were essential
<ommoditics within tlie meaning of Art. 286(3) of the Constitution which was operative from August 9, 1952. The High
Court found against the appellant.
Held that even asswning that the words "iron and steel"
in Entry 14 of the Schedule to the Act were comprehensive
enough to include articles made of iron and steel, that would
not necessarily render the uotification invalid under Art. 286(3}
of the Constitution.
Article 286( 3) as it stood before the Constitution (Sixth
Amendment} Act, i'956, could be succe,sfully. invoked onlr if
three conditions were satisfied,--( I) that the impugned leg1Sla·
tion wa!i une by the Legisld.turc of a State, 1.:onstitutt:d un?er
the Uons\itution, .(2) that it was subsequ~nt to the declaration
made by the Parliament as to the essential character of the
commodity and ( 3) that it could be, but wa; not, reserved
for the President's comideration and assent.
It wa:; obvious, therefore, that a subsequent Parliamentary
I
2 S.C.R.
SUPREME COURT REPORTS
925
declaration could not affect the validity of an enactment
retrospectively.
Sardar Soma Singh v. The State of Pepsu and Union of
India, (1954) S. C.R. 955 and Firm of A. Gowri•hankar
v. Sales Tax Ufficer, Secunderabad, A. I. R. 1958 S. C. 883,
referred to.
Although the Act, under which the impugned notllication
was made, satisfied the first condition, it did not satisfy the
second or the third and, mnsequently, its validity could not
be questioned unde1 Art. 286(3) of the Constitution,
Held, further, that it was apparent from s. 3 of the
Essential Goods (Declaration and Regulation of Tax on Sale
or Purchase) Act, 1952, that if a law had been passed prior
to the commencement of the Act authorising the imposition
of a tax, itS'validity could not be challenged on the ground
that the said commodity was subsequently declared by the Act
to be essential for the life of the community. The. impugned
notification and the State Act under which it was made were,
therefore, outside the purview of s. 3 of the Act.
C1vn, APPELLATE JURISDICTION: Civil ApPeals
Nos. 509 and 510 of 1960.
Appeals by special leave from the judgmellt
and order dated October 26, 1956, of the former
Madhya Bharat High Court Indore, in Ci·;i! Misc.
Cases Nos; 26 of 54 and 48 of 55.
A. V. Viswanatlta Sastri, C. B. Agarwala and
A. G. Ratnaparkhi, for the appellants.
R. J, Bhave and I. N. Shroff, for the respon·
dents.
1961. July 26.
The Judgment of the Court
was delivered by
1961
The Indore Iran
aiui Stul
Registered Stocf,,,
holrler1' ,48111.
v.
The State of
Madhya Prarleak
GAJENDRAGADKAR, J.-The appellant,
the Gajend1agaiikar
Indore Iron and Steel Registered Stock.holders'
J.
Association (Private) Ltd., is a registered Association whose constituent members carry on bu8ine8s
generally in fabricated iron and steel material and
more partic~larly in iron sheets, plain or corrugated,
b~rs, ro~s, hght an~ heavy structurals, nail8, joints,
wire nails and ftll kmds and v~rieties of wires and
1961
The Indore lroro
and Sleei
Registered Stockholdtre' Assn.
v.
The State of
Jf adhya Pradesh
Gajendragadkar
J.
926
SUPREME COURT REPORTS
[1962)
pipe,. This hnsine8s iR carried on by the constitueut members of the appellant at Indore anu
Ratlam at 'Vhich :places they have their rngistered
officeo.
The State of Madhya Bharat, by its Act
:No. 30 of 1950, imposed sales tax in the territory
of }fadhya Bharat on the sales of goods tJ,ierein
specified with elFect from May 1, 1950, and under
the provisions of the said Act the Commissioner of
Sales Tax, Madhya Bharat, and the Sales Tax
Officer, Indore, who are respondents 2 and 3, were
appointed aut.horities for the assessment of tax
leviable under the Act and for its recovery in their
respective areas.
Section ;l of the Act is the charging section
and it provides for t.he incidence of taxation, Section !, which deals with the application of the Act,
exemption and exclusion, provides by Sub.s. (2)
that no tax shall be payable under the Act on the
sale. of goods specified in the second colunin of
Sch. l on conditions mentioned in column 3 of
the Schedule.
"Iron
and steel"
appears in
Sch. 1 as item 39. Section 5 prescribes the rate of
tax and it provides that the tax will be recoverable
as notified from time to time by the Government
by publication in the official gazette subject to the
condition that it shall not be less than Rs. l ·9-0 per
cent or more than 6! per cent. Section 4(3) authorises the Government by notification to modify
Sch. l
from
time to time. Similarly s. 5(2)
authorises the Government while notifying the tax
payable by a dealer to notify the goods and the
point of t.heir sale at which the tax is payable. It
is by virtue of this delegated power that the State
of Madhya Bharat, respondent I, purported to is~11e
not.ifi<'ations to which we will presently refer.
On May 22, 1950, a notification was issued
under s. 5(2) specifying serially the articles taxed,
the stage of sale by traders in Madhya Bharat on
which tho tax is levied and the rate of sales tax per
cent. Item 27 in the list dealt with goods manu-
I
28.C.R.
SUPREME COURT REPORTS
927
factured from things (wastu) except gold and silver
or goods manufactured from more than one metal
(except circles and sheets of copper, brass and aluminium). The notifications provided that the tax
had to be paid by the producer or importer at the
rate of Rs. 3-2-0 per cent.
Meanwhile Art. 286(3) of the Constitution had
come into force.
This Article as it then stood provided that no law ·made by.the J ... egjslature of a
State imposing, or authorising the imposition of, a
tax on the sale or purchase of any such goods as
have been declared Ly Parliament by law to be
essential for the life of the community, shall have
effect unlesH it has been reserved for the consideration of the President and has reeeivt>d his assent.
Thereafter Parliam<'nt by law proceeded to
make the declaration as contemplated by this
Article by s. 2 of Act 52 of 1952 [Essential Goods
(Declarat.ion and Regulation of Tax on sale or
purchase) Act] (hereafter called the Act) which was
passed on August 9, 1952. Section 2 of the Act
provides that the goods specified in th<> Schedule
are hereby declared to be essential for the life of
the community. Item 14 in the Schedule refers to
'iron and steel'. Thus, as a result of tlu·se provisions 'i1 on and stee !' cam!' to be declared as essential
for the life of the community within the meaning
of Art. 286(3) as from August 9, 1952.
Respondent 1 thereupon purported to give
effect to the provisions of Art. 286(3) ands. 2 of the
Act by issuing two notifiratiuns on October 24,
1953. By the first notification it was provided
that no tax shall be payable inter alia on the sale
of iron and steel. 'Iron and steel' was placf'd at
item 39 in the said Schedule. The other notification issued on the same day by itrm 9 in the list
provided for the sale of the articles specifif'd in the
said item.
This item reads thus :
1961 -
The Indore Iron
and Steel
Registered Stock-
/wider•' A•sn.
v.
The State of
JI adhya Praduh
Gajendragad kar
J.
1961
The Indore Iron
and Steel
Registered Stockholders' Assn.
v.
The State of
Madhya Pradesh
Gajendragad kar
J.
928
SUPREME COURT REPORTS
[1962]
"Every kind of metal including copper,
brass, manganese, zinc, lead, mercury, bronze,
nickel, aluminium, tin and their ore form (excluding iron, steel, gold and silver) and goods
prepared any metal other than gold and
silver, utensils and wires, goods prepared
from one ore more than one metal, ntensils
and wires which· also includes mangars,
metal pieces and scraps, cutting and lantern,
gas, stove and type-letters (excluding circles
and sheets of copper, brass and aluminium)."
It is common-ground that under this notification the
artidcs in which the constituents of the appellant
deal would be liable to pay the sales tax in question.
After this notification was issued the appellant
wrote to respondent 3 claiming exemption from
payment of sales tax for the goods and articles in
which its constituent members are dealing but this
plea was rejected by the said respondent, and the
constituent members of the appellant were called
upon to pay sales tax each in respect of their individual turnover. It was under these circumstances
that the appellant filed two writ petitions under
Art. 226 of the Constitution in the High Court of
Madhya Bharat at Indore in which it challenged
the validity of the assessment orders passed for the
two years 1953-54 and 1954-55 respectively (Petitions Nos. 26 of 1954 and 48 of 1955).
The appellant's case was that the articles in
which the constituent members of the appellant
dealt were covered by the parliamentary declaration contained in s. 2 of the Act and as such were
no longer liable to pay sales tax. This plea was
resisted by the respondents. It was urged on their
behalf thnt the notification issued by respondent 1
on Octo b<•r 2'1, l!l53 was valid, nnd item 27 in the
list notifier] bronght thf' articles in question within
the misl'hief of the S:iles Tax Act and so the
petitioners were not entitled to any writ as claimed
by them. The High Court has upheld the pie&
I
2S.C.R.
SUPREME COURT REPORTS
929
raised by the respondents, rejected the contentions
urged by the appellant 11nrl has <lismisscrl the writ
petitions filed by it. It is against these orders of
dismissal passed by the High Court in the two writ
petitions filed by the appellant that the present
appeals, Nos. 509 and 510 of 1960, have been
brought to this Court by special leave granted by
this Court.
Two points have been urged before us by
Mr. Viswanatha Sastri, on behalf r>f the appellant,
in support of these appeals. It is urged that s. 2
of the Act which contains the parliamentary
declaNtion as contemplated by Art. 286(3) covers
iron and steel as understood in their commercial
sense. The words "iron and steel" should not be
interpreted in their narrow dictionary meaning.
They do not mean iron and steel a~ they come out
after smelting but they mean articles exclusively
made from iron and steel in which the identity of
iron and steel has not been lost. In other words,
iron and steel in the context mean all articles made
exclusively of iron and steel in which steel merchants normally and generally trade. It is further
argued that in construing the words "iron and
steel" we must bear in mind the fact that the objeet
of Art. 286(3) is to safeguard the interest of the
consumer in regard to the articles which Parliament
may declare to be .essential for the life of the community, and it is suggested that if the narrow dictionary meaning of the words is adopted it would
not 'Serve the said obj~ct and purpose of the constitutional provision.
Mr. Sastri has also relied on what he has
described as the legislative history which indicates
that the said words should receive a broad and
wide construction in tbe context. In that connection he has invited our attention to the provisions
of s. 2(d), s. 3 i111d
the
categories specified
in the Second Schedule to the Iron and Steel
1961
The Indore Jro11
and Steel
Registered Stock·
holders' Assn.
v.
The State nf
Madhya Pradesh
Gajendragadkar
.1.
1961
The Indore Iron
and Steel
!legistered Stockholders' Asen.
v.
The Stale of
Madhya Pradesh
Gajendragad l"1r
J.
930
SUPREME COURT REPORTS
(Control of Produciion and Distribution) Order, 1941.
These categories, according to Mr. Sa:stri, unmistakably support his argument that the expression "iron
and steel" as used in the order was obviously used in
a very wide and broad sense. Similarly, he has
referred to the provisions of s. 2(a)(vii) of Act XXIV
of 1946 (The Essential
Supplies (Temporary
Powers) Act, 1946) and s. 2(a)(vi) of Act 10 of 1955
(The Essential Commodities Act, 1955). His contention is that it would be legitimate for the Court to
consider the legislative history in the matter of the
use of these words and their denotation, and that
the legislative history to which he has referred
supports his argument that the words "iron and
steel" should receive a very liberal interpretation
in determining the effect of the provisions of s. 2
of the Act.
The High Court was not impressed by
this argument. It has held that the words "iron
and steel" as used in Entry 14 to Sch. I of the
Act do not include within their ambit articles
made of iron and steel such as those with which we
are concerned in the present proceedings. Mr. Sastri
seriously que8tions the correctness of this conchision.
It is clear that even if we were to accept
Mr. Sastri's contention in regard to the denotation
of the words "iron and &tee l" as used by the
relevant provisions of the Act it would still have to
be shown by the appellant that the impugned
notification is invalid because it contravenes the
provisions of Art. 286(3). In other words, in order
to succeed in the present appeals the appellant has
to prove two facts, (1) that the words "iron and
steel'' in respect of which the requisite parliamentary decbration has been made by s. 2 of the Aciu
include commodities like those with which we are
concerned, and (2) that the impugned notification
contravenes Art. 286(3). It would thus be seen
that unless the appellant succeeds in both these I
contentions the appeals are bound to fail.
Since
•.
'
2 S.C.R.
SUPREME COURT REPORTS
931
we have reached the <'onclusion that even on the
assumption that the parliamentary declr.ration
made by the relevant provision of the Act includes
commodities with which we are concerned ib c·orrect
it does not follow that the impugned notification
contravened Art. 286(3) we do not propose to deal
with the first point raised by Mr. Sastri. In dealing
with these appeals we would assume in his favour
that the words "iron and sted" should receive
th;e broad and wide interpretation for "·hich he
contends.
Assuming then that the articles in which the
constituents of the appellant deal are covered by
the parliamentary declaration made by the Act
does it follow that the impugned notification
contravenes Art. 286(3) ? That takes us to the
provisions of Art. 286(3) which we have already
cited. This provision can be successfully invoked
only if three conditions are satisfied. The first
condition is that the impugned law must be one
which is made by the Legislature of a State which
obviously means a State which came into existence
under and after the Constitution ; and that shows
that the impugned law must be a law made by the
Legislature of a State subsequent to the Constitution. This condition is satisfied in the present case
because the impugned notification has been issued
by virtue of the authority delegated to respondent
I by Act 30 of 1950 and this Act was passed after
the Constitution was adopted.
Let us then consider the second condition
which is also in the nature of a condition precedent.
This condition requires that the impugned law
must impose or authorise the imposition of a tax on
the sale or purchase of any such goods as have been
declared by Parliament by law to be essential for
the life of the co=unity. There can be little
doubt that this condition postulates that at the time
when the impugned law is passed there is a
1961
The Indore Iron
and Steel
Registered Stock·
holders' Assn.
v.
The State of
Madhya Pradesh
Gajendragadkar
J;
1961
'L'he Indore Iron
and Steel
R egi8tertd Stockholders' A•an.
v.
The State ~f
Madhya Prade8h
Gajendragadkar
J.
932
SUPREME COURT REPORTS
[1962J
preexisting declaration made by Parliament in reganl to the essential character of a commodity. The
!'rraterial words in respect of this condition are that
the sale or purchase of any such goods as have been
declared by Parliament by law to be essential for the
life of the community. Therefore, if tho parliamentary declaration follows the impugned enactment
it cannot retrospectively affect the validity of the
said enactment. Article 286(3) contemplates that
if in the face of an existing parliamentary declaration about the essential character of a commodity
the Legislature of a State purports to impose or
authorise the imposition of a tax on such commodiey
the enactment would be invalid unless the law
made by the Legislature has been reserved for the
consideration of the President and has received his
assent.
'l'he third condition emphasises that the
impugned law must have been passed subsequent to
the Constitution, because unless the relevant provision of the Constitution for the reservation of the
law for the consideration of the President has come
into force this condition cannot apply.
This
requirement obviously means that the office of the
President must have come into existence and so
this condition can become operative only after the
Constitution has come into force.
Therefore, the
third condition supports the conclusion which arises
from the word8 used in the first condition itself.
Thus the position is that Act 30 of 1950
satisfies the first condition but not the second. It
is conceded that the relevant provisions of the
M. B. Act of 1950 authorise the imposition of tax
ou the commodities in question and that the
impugned notifif'tt1 ion is otherwise consistent with,
and justiii<-•l b.v. tlw said provisions of the Act.
Now, if the HH id ;)l. H. Act authorises the imposition
of tax on the good8 in question and the said goods
were not declared by Parliament by law to be
.•
I
2 S.C.R.
SUPREME COURT REPORTS
933
essential for the life of the community before the
date of the said Act its validity cannot be
challenged on the ground that it was not reserved
for the consideration of the President and had not
received his assent. It is only when all the conditions prescribed by Art. 286(3) are present that the
validity of the impugned law can be successfully
challenged.
The question about the construction of
Art. 286(3) has been considered by this Court on two
occasions. In Sardar Sarna Singh v. The State of
Pepsu and Union of India('), S. R. Das, J., as he
then was, who spoke for the Court has observed
that it is quite clear that s. 3 of Act 52 of 1952 does
not affect the Ordinance there challenged for the
said Ordinance was not made after the commencement of the Act, and that Art. 286(3) contemplates
a law which can be but has not been reserved for
the consideration of the President and has not
received his assent. This position clearly points to
post-constitutional law for there can be no question
of an el.\sting law continued by Art. 372 licing
reserved for the consideration of the President for
receiving his assent. This decision supports the
conclusion that the law contemplated by the first
condition specified in Art. 286(3) must be postconstitutional law.
To the same effect are the
observations made in the majority judgment of this
Court in Firrn of A. Gowrisha11kar v. Sales Tax
Offieer, Secunderabad( 2).
In this connection it would be relevant to
refer to s. 3 of the Act itself. It provides that no
law made after
the
commencement of
this
Act by
Legislature of a State imposing or
authorising the imposition
of a tax on the
sale or purchase of any goods declared by this Act
to be essential for the life of the community shall
have effect unless it has been reserved for the consideration of the President and has received his
(I) (1954) S.C.R. 955.
(2) A.I.R. 1958 S.C. 883.
1961
The 1 ndore lror.
and Steel
Registered Stockholders' A88n.
v.
The State of
Madhya Pradesh
Gajtndrrigadkar
J.
1961
The I ntlore Iron
and Stttl
Registered Swckkolders' Assn.
v.
The State of
Madhya Pradesh
Uajendragadkar
.
J.
1961
July 28.
934
SUPREME COURT REPORTS
[1962]
assent. This provision also shows that the decla·
ration made by the Act was intended to be pros·
pective in operation and it would affect lawsmade
!j,fter the commencement of the Act, and that
clearly must mean that if a law had been passed
prior to the commencement of the Act and it
authorised the imposition of a tax on the sale or
purchase of certain commodities its validity cannot be challenged on the ground that the said commodities have been subsequently declared by the
Act to be essential for the life of the community.
The impugned notification with which we are concerned and the Act under which it has been issued
are thus outside the purview of s. 3 of the Act.
That in substance IS the finding made by the
High Court on the second contention raised before
it by the appellant. In our opinion, the conclusion
of the High Court on this point is right.
In the result the appeafa fail and are. dismissed with costs.
Appeals dismissed.
THE AHMEDABAD MISCELLANEOUS
INDUSTRIAL WORKERS' UNION
v.
THE AHMEDABAD ELEC'1'RICITY CO. LTD.
(K.N. WANCHOO and K.C. DAS GUPTA, JJ.)
Bonus-Payable by electricity company-Depr,ciationModt nf calculation-Indian. -Ineome-ta,v Act (11 af 1922),
Rules-Scli. VII-Electricity (Supply) Act, W48 (54 of 1.948).
The respondent, which is an electricity company, con·
tested the claim of the appellant for three months' wages as
bonus on the ground that if calculation was made on the Full
Bench Formula evolved by the Labour Appellate Tribunal and
approved by this Court in the Associated Cement Companies
Ltd. v. Its
Workmen,
(l!J59) S. C.R. 925, there would
be no surplus available to pay the bonus. The question which
arose for decision was \Vhcther d.:;preciation should be calculated according to the provisions of Income-tax Act and the
. t
•