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(b) any amount by way of development rebate or development allowance which the employer is entitled to deduct from his income under the Income-tax Act;
(c) any direct tax which the employer is liable to pay for the accounting year in respect of his income, profits and gains during that year; and
(d) such further sums as are specified in respect of the employer in the Third Schedule.

Section 7 deals with calculation of direct taxes payable by the employer for any accounting year for the purpose of cl.(c) of s. 6. Sections 8 & 9 deal with eligibility for and disqualifications for receiving bonus. Sections 10 to 15 deal with payment of minimum and maximum bonus and the scheme for "set-on" and "set-off". Every employer is by s.10 bound to pay to every employee in an accounting year minimum bonus which shall be four per cent. of the salary or wage earned by the employee during the accounting year or Rs. 40 whichever is higher, whether there are profits in the accounting year or not. In case of employees below the age of 15, the minimum is Rs. 25. By s. I I where in respect of any accounting year the allocable surplus exceeds the amount of minimum bonus payable the employer shall be bound to pay to every employee in the accounting year bonus which shall be an amount proportionate to the salary or wage earned by the employee during the accounting year, subject to a maximum of twenty per cent of such salary or wage. Section 15 provides that if for any accounting year the allocable surplus exceeds the amount of maximum bonus payable to the employees in the establishment under s. 1 1, then, the excess shall, subject to a limit of twenty per cent. of the total salary or wage of the employees employed in the establishment in that account year, be carried forward for being "set-on" in the succeeding accounting year, upto and inclusive of the fourth account year, and be utilised for the purpose of payment of bonus.

The scheme of the Act, broadly stated, is four dimensional:

(1) to impose statutory liability upon an employer of every establishment covered by the Act to pay bonus to employees in the establishment:
(2) to define the principle of payment of bonus according to the prescribed Formula; (3) to provide for payment of minimum and maximum bonus and linking the payment of bonus with the scheme of "set-off " and "set-on"; and (4) to provide machinery for enforcement of the liability for payment of bonus.
under any award, agreement, settlement or contract of service, bonus for the accounting year has to be determined according to the following scheme First determine the ratio of the bonus paid or payable to all employees (not workmen merely as defined in the Industrial Disputes Act) for the base year as defined in Explanation II(a) to the gross -profits as defined in Explanation II(b) of that year, and apply that ratio to the gross profits as defined in Explanation 11 to the accounting year and determine the allocable surplus. That allocable surplus will be distributed among the employees subject to the restriction that no employee shall be paid bonus which exceeds 20 % of the salary or wage earned by an employee, and that if the allocable surplus so computed exceeds the, amount of maximum bonus payable to the employees in the establishment then the provisions of s. 15 shall so far as may be apply to the excess.

The, payment of bonus is now legislatively recognised and the Full Bench Formula is not only altered but it Is to be seen that payment of some bonus is compulsory and the payment in any year lies within two terminii of minimum and maximum bonus established by the Act. The calculation of bonus becomes almost mechanical and, therefore, disputes are less likely to take place. But the Act, although the result of a tripartite deliberation, has not-satisfied the employers generally. They object to some of its provisions on various grounds and we shall now proceed to examine them. The first attack is on the provision for minimum bonus in s. 10 irrespective, of profits. It is submitted that a concept of minimum bonus, unrelated to profits, makes the payment an accretion to wages and leads indirectly to the erosion of capital since such payment. if it does not come from profits, must come from reserves or capital. The provision is thus said to be a "fraud on the Constitution" or "a colourable exercise of power" conforming neither to the accepted concept of bonus nor to the principles on which minimum wages are fixed. Section 10 is also said to offend Art. 14 inasmuch as it makes no difference between companies making profits and companies having losses whether marginal or heavy., It is said,.that the fixation of the minimum bonus irrespective- of consideration such as the kind of wages and dearness allowance prevailing in an establishment; profit or loss in its business; and whether bonus is integrated with wages or not, creates inequality. It is pointed out that while bonus was formerly calculated on basic wage only and took no note of dearness allowance, the Act, by defining "wage or salary" to include dearness allowance has increased the quantum of bonus payable. Even the 5 years' exemption to new establishments is criticised as discriminatory. Section 10 is said to enable deprivation of the property of the employers with a view to paying it to the workmen. The contending parties could not attack the Act under Art. 19 in view of the Emergency, but did not also give up the point, although corporations not being citizens, have been held by this Court to be not entitled to invoke the provisions of that article. In our judgment none of the arguments against s 10 can be accepted.