New Delhi: A woman is not a chattel and has an identity of her own, the Supreme Court asserted on Friday as it struck down a discriminatory provision that excluded Sikkim women married to people from outside the state after April 2008 from exemption allowed under the Income Tax Act, 1961.
Extending the exemption under Section 10(26AAA) of the 1961 law even to persons of Indian origin residing in Sikkim as on April 26, 1975, when the state merged with India, the top court virtually extended the tax exemption net to almost 95% population in the northeastern state. The earlier exemption was applicable to those holding the Sikkim Subjects Certificate and their descendants and were made Indian Citizens vide the Sikkim Citizenship Amendment Order, 1989. These two categories consisted of the Bhutia Lepchas, Sherpas and the Nepalis who together constituted to about 94.6% of the state’s population. The old settlers, who were domiciled in Sikkim on the date of its merger with India, constituted 1% of the population or nearly 500 families, who had approached the apex court.
Dealing with a petition filed by the Association of Old Settlers of Sikkim challenging Section 10(26AAA) of the Income Tax Act, 1961, the bench of justices MR Shah and BV Nagarathna found the provision “arbitrary, discriminatory and unconstitutional” as it excluded women on the ground of gender and marriage while denying similar benefits to persons already domiciled in the state and who belonged to Indian origin.
{{/usCountry}}Dealing with a petition filed by the Association of Old Settlers of Sikkim challenging Section 10(26AAA) of the Income Tax Act, 1961, the bench of justices MR Shah and BV Nagarathna found the provision “arbitrary, discriminatory and unconstitutional” as it excluded women on the ground of gender and marriage while denying similar benefits to persons already domiciled in the state and who belonged to Indian origin.
{{/usCountry}}“A woman is not a chattel and has an identity of her own, and the mere factum of being married ought not to take away that identity,” ruled Justice Shah, adding, “The discrimination is based on gender, which is wholly violative of Articles 14, 15 and 21 of the Constitution of India.”
The denial of exemption to Sikkimese women married to men outside Sikkim after April 1, 2008 was part of proviso to Section 10(26AAA). The court noted that such exclusion did not apply to Sikkim men who married a non-Sikkimese woman.
Justice Nagarathna, in a separate but concurring opinion, said: “The proviso to clause (26AAA) of Section 10 of the I.T. Act, 1961, is a stark example of an unconstitutional sex-based discrimination and is liable to be struck down.”
Further, the court found the definition of “Sikkimese” in Section 10 (26AAA) to the extent it excludes Indians who have settled in Sikkim prior to the merger of Sikkim with India on April 26, 1975 to be unconstitutional.
It was in 1989 that the I-T Act was extended to Sikkim. There was resistance by the Sikkim government over this move and a joint committee consisting of the members from the Centre and state government was formed to resolve the differences for implementation of the 1961 act in the state.
In the bargain, Section 10(26AAA) was carved out exempting nearly 94% of the state’s population from paying income tax. This provision was introduced into the Act in 2008 and the petitioners alleged it discriminated persons of Indian origin in Sikkim from the Sikkim subjects and persons who later became citizens of India in 1989. The proviso to this provision brought in an exclusion of Sikkimese women who marry non-Sikkimese after April 1, 2008.
The court accepted their demand and said, “Of the 5% of the residents of Sikkim of which about 1% are the people like the petitioners, who, as such are also the bona fide settlers of Sikkim, are being singled out from exemption from payment of income tax on the sole ground that they are not recorded in the register under the Sikkim Subject Regulation 1961.”
The bench said, “The exclusion has no nexus with the object and purpose of enacting Section 10(26AAA) of the Income Tax Act to be achieved. No reasonable intelligible differentia has been shown and therefore, the same can be termed as arbitrary. It is held that the “Sikkimese” like the petitioners, who are old Indian settlers and who have settled in Sikkim prior to the merger of Sikkim with India on April 26, 1975 shall also be entitled to the exemption under Section 10(26AAA) of the Income Tax Act, 1961.”
Justice Nagarathna in her separate opinion further directed that till such time the Parliament adds an explanation extending the exemption to old settlers of Sikkim as well, this category of persons will be entitled to benefit under Section 10(26AAA). However, the proviso found discriminatory against women was struck down by both judges.