TaxTMI 
TaxTMI 
1988 (8) TMI 12
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..... The bank submitted its return as prescribed under the Act and the Rules and deducted profession tax payable by its employees, including the second petitioner, from time to time, from the salary bill for each month. In August 1979, there was a bipartite-settlement between the Indian Banks' Association and the All India Bank Employees' Association and the National Confederation of Bank Employees. According to the said settlement, the first petitioner-bank and its employees agreed to revise the emoluments payable to the employees of the bank with effect from August 1, 1978, and accordingly the arrears of emoluments payable to the employees for the back period of one year, i.e., from August 1, 1978, to July 31, 1979, was paid in a lump ....
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....asis of the revised salary as short-payment or differential tax. As result of the said order, deduction was made in the salary bill of each employee for the month of December, 1979, towards the difference of tax on the revised salary. This order was thus made applicable to all the employees of the bank who had enrolled themselves under the Act. This order is challenged in this writ petition by the bank on various grounds. It is contended by Sri Naganand, learned counsel for the petitioner, that the expression "salary", as defined in the Act, includes only the pay received by the employee on "regular basis" as per section 2(j) of the Act. The charging section, section 3, provides for levy and collection of profession tax at the rates spec....
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.... the Interpretation of Statutes, 12th Edition, page 256). Sri Naganand has also relied upon the observations of Lord Simonds in Inland Revenue Commissioners v. Wolfson (J.) [1949] 1 All ER 865, at p. 868 (HL) : "It is not the function of a court of law to give to words a strained and unnatural meaning because only thus will a taxing section apply to a transaction which, had the Legislature thought of it, would have been covered by appropriate words." It is, therefore, argued that the levy must fail on account of the definition of salary under which the tax is levied on the salary for the month paid on regular basis and that definition does not include arrears of salary. The order proposing to levy tax on the arrears of salary is so....
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....evy of profession tax on the arrears of salary for each month from September, 1978, to October, 1979, can be sustained in law ?" On a perusal of the scheme of the Act, the charging section, the definition of salary or wage and the Schedule to the Act, it can be seen that profession tax is levied and collected on the basic salary or wage received by any person "on regular basis", whether in cash or kind and calculated on the basis of the amount of salary drawn for a month and at the rates specified in the Schedule. What is a salary or wage received on "regular basis" according to its definition has to be understood as a salary or wage paid and received for each month. The difference of salary on account of enhancement of salary with re....
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....ificantly seen is, the Legislature has provided for the levy of income-tax on arrears of income also, whenever received by an income-tax assessee with the necessary relief as prescribed under the Rules which provides for the spread over of the income over the period for which the arrears are paid and received. Nothing was easier than to amend the definition of salary or wage in the Profession Tax Act in order that tax could be levied on arrears of salary received as a result of the settlement as in this case and to meet similar contingencies. Sri Dattu, learned High Court Government Pleader, took time to consult the Department, if any such amendment could be thought of or suggested in order to meet the situation like the present one a....