New Delhi: A woman is not chattel, the Supreme Court observed Friday, while striking down a provision of the Income Tax Act which denied tax exemption to Sikkimese women who have married non-Sikkimese.
A bench comprising Justices M.R. Shah and B.V. Nagarathna observed: “As rightly submitted, 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.”
The court was hearing two petitions which, among other things, challenged that part of Section 10 (26AAA) of the Income Tax Act, 1961, which excluded Sikkimese women who have married a non-Sikkimese after 1 April, 2008, from getting exemption under the Act.
Section 10 of the 1961 Act provides for exemptions to a salaried professional while paying income tax, and describes income sources that are not a part of the total income.
Clause 26AAA of Section 10 says that a Sikkimese individual’s income from any source in the State of Sikkim or by way of dividend or interest on securities would be exempted. However, the provision clarifies that a Sikkimese woman married to a non-Sikkimese would not get the benefit of this exemption.
The petitioners had challenged this provision as violative of Articles 14 (equality before law), 15 (right against discrimination on the grounds of religion, race, caste, sex or place of birth) and 21 (right to life and personal liberty) of the Constitution.
In response, Additional Solicitor General N. Venkataraman, appearing for the Union Department of Revenue, contended that the disqualification was based on the customary laws of Sikkim which provide that descent shall be through a woman’s father and any privileges vested through such descent would continue until the woman is married.
However, the lawyer appearing for the Sikkim government, advocate Vivek Kohli, submitted that the state government has no objections if the tax exemption is extended to all Sikkimese women.
The court asserted that there was “no justification shown” to exclude women who married non-Sikkimese from the exemption, and pointed out that there is no such disqualification for a Sikkimese man who marries a non-Sikkimese. It observed that the discrimination is based on gender and, therefore, violates Articles 14, 15 and 21 of the Constitution.
The court also opined that there was no justification for the cut-off date of 1 April, 2008, as well and called the provision arbitrary and discriminatory.
“Therefore, proviso to Section 10 (26AAA) in as much as it excludes from the provision of exemption a Sikkimese woman merely because she marries a non-Sikkimese after 01.04.2008 is totally discriminatory and violative of Articles 14, 15 and 21 of the Constitution of India, which requires to be struck down,” the Supreme Court ruled.
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‘Also wrong to exclude old Indian settlers’
Section 10 (26AAA) of the Income Tax Act also excluded from the definition of “Sikkimese” Indians who permanently settled in Sikkim prior to the merger of the state with India on 26 April, 1975.
The petitioners also challenged this provision as discriminatory and submitted that approximately 500 such families in Sikkim are affected by this definition. They had also contended that the benefits under Section 10(26AAA) were available to migrants from other countries or erstwhile kingdoms, such as Nepalese migrants, who had migrated to and settled in Sikkim at the same time or even after migrants/settlers of Indian origin, but were not available to settlers of India origin.
The majority judgment authored by Justice M.R. Shah struck down this provision as well, and ruled: “Therefore, exclusion of old Indian settlers, who have settled in Sikkim prior to the merger of Sikkim with India on 26.04.1975 from the definition of ‘Sikkimese’ in Section 10(26AAA) is arbitrary, discriminatory and violative of Article 14 of the Constitution of India.”
In a separate opinion, Nagarathna issued a direction to the central government to suitably amend Section 10 (26AAA) of the Act to extend the exemption to all Indian citizens who were domiciled in Sikkim before it merged with India on 26 April, 1975.
However, she said that till such an amendment is brought in, all old Indian settlers who settled in Sikkim prior to April 1975 would also be entitled to the benefits of the exemption.
Move will benefit 500 families
The judgment would benefit approximately 500 families, who were excluded from the definition of ‘Sikkimese’ under Section 10(26AAA), the SC order said.
Under Section 10(26AAA) of the Act, the exemption applied to those people whose names are recorded in the ‘Register of Sikkim subjects’. This register was to be maintained under the Sikkim Subject Regulation 1961, promulgated by the then Ruler of Sikkim, The Chogyal.
The regulations said that people who were born in Sikkim and lived there qualified for registration as Sikkim subjects. However, they could register only if they made a declaration that they were not a citizen of any other country at that time. Therefore, Indian citizens whose ancestors had settled in Sikkim for generations had to give up their citizenship of India for converting themselves to a “Sikkim subject”.
However, some families, including a few that were a part of the association that had approached the Supreme Court, did not surrender their citizenship of India at that time, and so their names were not registered as “Sikkim subjects” under the regulations.
In 1975, after Sikkim became a full-fledged State in India, a notification was issued by the central government, declaring that all Sikkim subjects were to be considered Indian citizens. Post this, through an order issued in 1989, cases of genuine omissions were reviewed and added to the Sikkim Subjects register.
These two categories of people — those holding the Sikkim Subjects Certificate and their descendants, and those who were made Indian citizens through the 1989 order — were finally granted exemption under the Income Tax Act through an amendment in 2008. As per the judgment, these two categories of people consisted of the Bhutia-Lepchas, Sherpas and the Nepalis who together constituted about 94.6 per cent of the total population.
The remaining 5 per cent of the residents of Sikkim were left out from the exemption. Of this 5 per cent, 1.50 per cent were old settlers of Indian origin and the remaining 3.84 per cent were new settlers, including those of Indian origin.
The 13 January judgment would now benefit these 1.5 per cent of old settlers of Indian origin.
(Edited by Nida Fatima Siddiqui)
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