Case: State of W.B. and Others Vs. Texmaco Limited

ny has a Scheme whereunder it pays to its employees what is called an "incentive bonus". The appellants took the stand that the incentive bonus fell within the definition of "salary" or "wage" contained in Section 2(j) of the West Bengal State Tax on Professions, Trades, Callings and Employments Act, 1979, and, therefore, it was liable to the levy of tax under that statute, which thewas bound to deduct and pay on behalf of its employees. This contention was theof applications before the West Bengal Taxation Tribunal. In its order under appeal, the Tribunal found that it was common ground that the incentive bonus was linked to production. It was paid at a certain rate for production in excess of a specified minimum quantity. It was payable only when production exceeded that quantity. If in a particular month, the production did not exceed the specified minimum quantity, there was no payment. If, on the other hand, there was in another month production exceeding the minimum quantity, the incentive bonus was payable commensurate with the additional production, which was naturally variable from month to month. Upon this basis, the Tribunal found that the payment of incentive bonus was not made on a regular basis and that, therefore, the requirement of the definition of "salary" or "wage" in Section 2(j) was not satisfied

Court's reasoning:
Judged only upon the basis of the Scheme, it must he held that it contemplates situations where the incentive bonus is payable and situations where it is not payable. Judged on the Scheme, therefore, the payments of incentive bonus are not on a regular basis. It would have been another matter had the appellants been able to place material before the Tribunal to show that, despite the terms of the Scheme, there had in fact been, over a substantial period of time, payment of incentive bonus from month to month