I found out what I was doing wrong. I had to grab the value sent by the php program to the perl script. The following worked ...

PHP Script:

<?
$var = 1;
passthru(/home/test.cgi $var);
?>

PERL Script(test.cgi):

#!/usr/bin/perl 

print "Content-type: text/html\n\n";

$var = $ARGV[0];

print "Value: $var";


OUTPUT:
Content-type: text/html Value: 1
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wee hee!