SC ends discrimination against Sikkimese woman marrying a non-Sikkimese; struck down proviso to Sec. 10(26AAA)

Case Details: Association of Old Settlers of Sikkim v. Union of India - [2023] 146 taxmann.com 271 (SC)

Judiciary and Counsel Details

• • B.V. Nagarathna & M.R. Shah, JJ.

Facts of the Case

The Association of Old Settlers of Sikkim and others have filed a writ petition under Article 32 of the Constitution of India, asking for a court order striking down Section 10(26AAA) of the Income Tax Act, 1961.

The petitioners have prayed to strike down Section 10(26AAA) to the extent it excludes Indians, who have settled in Sikkim prior to the merger of Sikkim with India on 26.04.1975 but their names are not recorded as “Sikkim Subjects”.

Further, a request was also made to remove the Proviso to Section 10(26AAA), which excludes “Sikkimese women” who marry non-Sikkimese after April 1, 2008, from the exempt category.

Supreme Court Held

The Supreme Court of India held the purpose of Section 10(26AAA) is to grant exemption to the residents of Sikkim. Therefore, all such Indians/citizens, who have settled in Sikkim prior to the merger of Sikkim with India on 26.04.1975 are to be treated at par as they form the same group/class.

Just because the Indian citizens settled in Sikkim did not relinquish their Indian citizenship or their ancestors were not registered under the Sikkim Subjects Regulations, 1961, at the time of its enactment, it cannot be concluded that they are no longer considered “Sikkimese”.

There is no nexus sought to be achieved in excluding the Indians, who have settled in Sikkim prior to the merger of Sikkim with India on 26.04.1975 but their names are not recorded as “Sikkim Subjects”. The Union of India has failed to satisfy any reasonable classification and/or nexus to exclude such class of Indians, who, have settled in Sikkim prior to 26.04.1975.

Therefore, excluding long-time Indian settlers who settled in Sikkim before its merger with India on April 26th, 1975, from the definition of “Sikkimese” in Section 10(26AAA) is unjust, unfair, and in violation of Article 14 of the Indian Constitution.

The Union of India shall amend the Explanation to Section 10(26AAA) to suitably include a clause to extend the exemption from payment of income tax to all Indian citizens domiciled in Sikkim on or before 26th April 1975.

Till such amendment is made by the Parliament, any individual whose name does not appear in the Register of Sikkim Subjects but it is established that such individual was domiciled in Sikkim on or before 26th April 1975, shall be entitled to the benefit of exemption. This direction is being issued in the exercise of powers under Article 142 of the Constitution.

About the objection to the Proviso in Section 10(26AAA) that excludes “a Sikkimese woman who marries a non-Sikkimese after April 1st, 2008” from the exemption category, no valid reason has been provided by the Union of India for this exclusion.

It should be noted that there is no disqualification for a Sikkim man, who marries a non-Sikkimese after 01.04.2008. Thus, there is clear discrimination based on gender, which is wholly violative of Articles 14, 15, and 21 of the Constitution of India.

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. Therefore, the Proviso to Section 10 (26AAA) is also struck down as being ultra vires Articles 14, 15, and 21 of the Constitution of India.