Retrospective application of fiscal welfare legislation is constitutionally valid and does not violate Article 300A.

The Petitioners challenged the retrospective application of the Payment of Bonus (Amendment) Act, 2015.

The Amendment Act received Presidential assent on December 31, 2015, but Section 1(2) made it effective from April 1, 2014.

The amendments increased the eligibility limit for "employees" from ₹10,000 to ₹21,000 per month (Section 2) and raised the salary ceiling for bonus calculation from ₹3,500 to ₹7,000 or the minimum wage (Section 3).

Petitioners argued that because the statutory eight-month window for paying the 2014–2015 bonus under Section 19(b) had expired on November 30, 2015, before the Act was gazetted, compliance was impossible and imposed an arbitrary financial burden relative to closed accounts.

The court applied the principle that the legislature possesses the competence to enact retrospective fiscal and welfare legislation, provided it is not "unduly oppressive or confiscatory".

It relied on Jalan Trading Co. v. Mill Mazdoor Sabha, establishing that bonus is a statutory right representing an equitable share in profits, not a gratuity.

The court followed Narottamdas v. State of Madhya Pradesh, which held that retrospective fiscal levies in labour statutes do not violate Article 20(1) if the duty to pay arises only after the law's publication.

The court noted that the right to property under Article 300-A is not absolute and can be divested by "authority of law", and that hardship or the need to reopen accounts does not render a taxing/fiscal statute invalid (Prashanti Medical Services & Research Foundation v. UOI).

The Court reasoned that the power to introduce retrospective fiscal levies is well-settled and the one-year retrospectivity (2014-2015) in this case was not excessive.

The Court dismissed the Article 20(1) challenge, noting that Section 19 of the PBA allows the Government to extend the time for payment up to two years; thus, Petitioners were not immediately criminalized for past non-compliance but could be granted time to discharge the new liability.

Regarding Article 300-A, the Court held that a company’s surplus is not "inviolable property" and can be subjected to welfare-based statutory liabilities for the working class.

The Court found the amendment was preceded by extensive tripartite deliberations involving employers' representatives, negating claims of procedural arbitrariness.

The Court noted that "hardship" in reworking accounts or financial deficits does not constitute a "confiscatory" burden sufficient to strike down a welfare statute.

It ruled that the additional bonus liability for 2014-2015 was neither confiscatory nor a violation of fundamental rights.

To mitigate the plea of impossibility, the Court extended the time for payment of the additional bonus for the 2014-2015 period by eight months from the date of the judgment and ordered that failure to pay within this period would attract interest at 8% per annum.

The writ petitions were disposed of accordingly.