ASSOCIATION OF OLD SETTLERS OF SIKKIM AND ORS. versus UNION OF INDIA AND ANR.

Citation: [2023] 10 S.C.R. 289 · Decided: 13-01-2023 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Disposed off

Cited by 2 judgment(s) · cites 14 · see the full citation network in Lexace

Judgment (excerpt)

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ASSOCIATION OF OLD SETTLERS OF SIKKIM AND ORS.
v.
UNION OF INDIA AND ANR.
(Writ Petition (C) No. 59 of 2013)
JANUARY 13, 2023*
[M. R. SHAH AND B. V. NAGARATHNA, JJ.]
Income Tax Act, 1961 – s.10(26AAA) – Sikkim Subjects
Regulations, 1961 – rr.3 and 4 – Right to Equality – Prohibition of
discrimination – Clause 26AAA to s.10 of the Income Tax Act, 1961
granted exemption to “Sikkimese” people – Explanation to Clause
26AAA defined the term “Sikkimese” – Definition of “Sikkimese”
in Explanation to s.10(26AAA) to the extent it excludes the Indians,
who have settled in Sikkim prior to the merger of Sikkim with India
on 26.04.1975; and proviso to s.10(26AAA) insofar as it excludes
from the exempted category “a Sikkimese woman, who marries a
non-Sikkimese after 01.04.2008” – Challenge to – Held (per M.R.
Shah, J.): Total 95% of the population of Sikkim are getting the
benefit of s. 10(26AAA) of the Income Tax Act and only 5% are left
out and out of which only 1% are the persons like the Old Indian
Settlers, but their names could not be registered as “Sikkim Subjects”
like the petitioner – Purpose of s.10(26AAA) is to grant exemption
to the residents of Sikkim from payment of income tax – 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 – They
form the same group/class and are entitled to the exemption u/
s.10(26AAA) – There is no difference and/or distinction between
those “Sikkim Subjects”, whose names are recorded in the register
maintained under the Regulations, 1961 and those Indians, who
have settled in Sikkim prior to the merger of Sikkim, but whose
names were not recorded as “Sikkim Subjects” in the register –
Merely because at the relevant time and when the Regulations, 1961
was enacted, the Indians settled in Sikkim did not surrender their
Indian citizenship or their fathers/forefathers’ names were not entered
into the register maintained under the Regulations, 1961, by itself,
it cannot be said that they cease to be the “Sikkimese” – Exclusion
289
[2023] 10 S.C.R. 289 : 2023 INSC 29
*Ed. Note: Subsequent order dated February 8, 2023 reported in [2023] 10 S.C.R. 368 to be
read as part and parcel of the present judgements dated January 13,2023.
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SUPREME COURT REPORTS
[2023] 10 S.C.R.
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 s.10(26AAA) is arbitrary, discriminatory and
violative of Art. 14 – The exclusion has no nexus with the object
and purpose of enacting s. 10(26AAA) of to be achieved – No
reasonable intelligible differentia has been shown and therefore,
the same can be termed as arbitrary – Hence, petitioners and
similarly situated persons who are old Indian settlers who have settled
in Sikkim prior to the merger of Sikkim with India on 26th April,
1975 shall also be entitled to the exemption under s.10 (26AAA) of
the I.T. Act, 1961 – Further, there is no justification shown and/or
demonstrated to exclude “a Sikkimese woman, who marries a non-
Sikkimese after 01.04.2008” from the exempted category – The
discrimination is based on gender which is wholly violative of Arts.
14, 15 and 21 of the Constitution – To deny the benefit of exemption
u/s. 10(26AAA) of the Income Tax Act to “a Sikkimese woman, who
marries a non-Sikkimese after 01.04.2008” is arbitrary,
discriminatory and violative of Art. 14 – Therefore the Proviso to
s.10(26AAA) insofar as it excludes from the exempted category “a
Sikkimese woman, who marries a non-Sikkimese after 01.04.2008”
has to be struck down – Held (per B.V. Nagarathna, J.): Under the
1961 Regulation, for women marriage has been the basis of
acquiring the status of having a domicile in Sikkim and being a
Sikkim Subject or losing domicile or status as a Sikkim Subject –
Marriage of a Sikkimese woman is also the basis for discrimination
against her whereas there is no such discrimination vis-à-vis a
Sikkimese man marrying a Sikkimese or a non-Sikkimese woman
on or after 1st April, 2008 – When the Explanation to s.10(26AAA)
refers to an “individual”, it includes both Sikkimese men and women,
in fact, all genders – Therefore, it cannot have a restrictive or myopic
reference to only Sikkimese men and exclude those Sikkimese women
– In the instant case, the proviso is overriding the provision as well
as the Explanation in respect of those categories of married
Sikkimese 

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