TaxTMI 
TaxTMI 
2023 (1) TMI 583
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....tition under Article 32 of the Constitution of India, the respective writ petitioners - Association of Old Settlers of Sikkim and Others have prayed for an appropriate writ, direction or order striking down Section 10(26AAA) of the Income Tax Act, 1961 (hereinafter referred to as the "Act, 1961"), more particularly, 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 26.04.1975. The petitioners have also prayed for an appropriate writ, order or direction striking down the Proviso to Section 10(26AAA) of the Act, 1961, insofar as it excludes from the exempted category, "Sikkimese women" who marries a non-Sikkimese after 01.04.2008. 2. Section 10(26AAA), the vires of which is under challenge reads as under:- "[(26AAA) in case of an individual, being a Sikkimese, any income which accrues or arises to him- (a) from any source in the State of Sikkim; or (b) by way of dividend or interest on securities: Provided that nothing contained in this clause shall apply to a Sikkimese woman who, on or after the 1st day of April, 2008, marries an individua....
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.... 4.1 The Kingdom of Sikkim came into existence in 1642. It was ruled as an independent Kingdom for 333 years till its merger with the Union of India in 1975. Originally the Kingdom of Sikkim held a large territory ranging from parts of present-day Bhutan, Bihar, West Bengal, Nepal and Bangladesh. In the 18th and 19th Century, a lot of territory was ceded to the British Empire in various conflicts. The Imperial British Government took over the control of the erstwhile Kingdom of Sikkim in the year 1888. However, there were conflicts with China. 4.2 In 1890, a Convention was signed between Great Britain and China to settle the boundaries of Sikkim and Tibet. The British control over Sikkim was recognized by China in the year 1890. Following British taking control of Sikkim, British Indian Subjects were allowed to hold Government employment in Sikkim. 4.3 In supersession of all earlier treaties, a fresh treaty was entered into between the British Government and the King of Sikkim in the year 1861. Under this treaty, the territory of Sikkim was restored to the King of Sikkim under certain conditions. These conditions included Article 8 under which the Government of Sikkim was t....
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....ed in Entry 22 of Schedule I to the Constitution of India. Article 371-F was also inserted in the Constitution under which it was, inter alia, open to the President or the Parliament to extend any law to the State of Sikkim, or repeal any existing law of Sikkim. 4.7 On 21.06.1975, the Home Department issued a notification stating that "all Sikkim Subjects (under the Sikkim Subjects Regulations, 1961) before 26.04.1975 were to be deemed Indian citizens". Therefore, this effaced the distinction between the persons of Indian origin residing in Sikkim (without giving up Indian Citizenship) and others who had taken up Sikkimese Citizenship. 4.8 Since a large number of eligible persons had been left out of the Sikkim Subject Register and were consequently denied Indian citizenship, Government of Sikkim issued a Memorandum that for the purposes of seeking employment, those claiming to be "Locals" should be able to show whether their parents' names are maintained on or before 15.05.1975 in the relevant Government Register. In the year 1980, notification was issued that domicile/ residential certificate issued by sources, other than District Collector, shall not be accepted as valid. ....
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....ax to the Schedule Tribes in Sikkim as was being done in regard to other states. The same was opposed by the lone M.P. of Sikkim. 4.16 Thereafter, the Government of India and the Government of Sikkim formed a joint committee consisting of the members from the Central Government and Government of Sikkim to resolve the differences for implementation of the Income Tax Act, 1961 in Sikkim. It appears that while discussing the matters relating to implementation of the Income Tax Act, 1961 to the State of Sikkim, the committee representing the State Government of Sikkim insisted on exemption for persons holding the Sikkim Subjects Certificate and their descendants and were made Indian Citizens vide the Sikkim Citizenship Amendment Order, 1989. It appears that these two categories essentially consisted of the Bhutia Lepchas, Sherpas and the Nepalis who constituted together about 94.6% of the total population. Discussions were held for four long years to secure exemptions to Sikkim Subjects Certificate holders and the people made citizens of India vide the Government of India orders dated 07.08.1990 and 08.04.1991 and their descendants. 4.17That in the year 2008, the Government of In....
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....ecommendations, which shall be dealt with hereinbelow. 4.20 As observed hereinabove, as per Proviso to Section 10(26AAA) "a Sikkimese women who marries a non-Sikkimese after 01.04.2008" is excluded for getting the benefit of exemption under Section 10(26AAA). 5. Feeling aggrieved and dissatisfied with the definition of "Sikkimese" in Section 10(26AAA) to the extent it excludes Indians (having Indian citizenship), who have settled in Sikkim prior to the merger of Sikkim with India on 26.04.1975 and thereby not granting the benefit of exemption under Section 10(26AAA) of the Income Tax Act to such Indians and being aggrieved by the Proviso to Section 10(26AAA), insofar as, it excludes from the exempted category "a Sikkimese woman, who marries a non-Sikkimese after 01.04.2008", the present writ 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 and insofar as it excludes from the exempted category "a Sikkimese woman, who marries a non-Sikkimese after 01.4.2008, being arbitrary, discriminatory and violative of Article 14 of the Constitution of India. 6. Sh....
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....39;ble Court that in order to be held valid any legislation under Article 14, the classification should be reasonable and must have a nexus with the object sought to be achieved; (v) It is contended that by way of the amendment, one single class of persons, namely, the citizens of India, are sought to be treated differently for the purpose of taxation; (vi) It is urged that to exclude the old Indian settlers from the exemption under Section 10(26AAA) has no nexus with the object sought to be achieved to grant the exemption to the residents of Sikkim; (vii) It is submitted that there is no reasonable classification between the residents/origins of Sikkim whose names were registered as "Sikkim Subjects" under the Sikkim Subjects Regulations, 1961 and those Indian old Sikkim settlers, whose names could not be registered as "Sikkim Subjects" as their forefathers did not surrender the Indian citizenship; (viii) It is further submitted that after the Sikkim became part of the Union of India, all the residents of Sikkim have become the citizens of India. Therefore, being citizen of India, settled in Sikkim, all are to be treated at par. It is contended ....
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.... of Rajasthan Vs. Manohar Singhji, 1954 SCR 996 : AIR 1954 SC 297. 7.1 Shri Vishwanathan, learned Senior Advocate appearing on behalf of the petitioner has further submitted that Court can remove discrimination and put the petitioners in the same class so as to do away with discrimination. It is submitted that in the present case, in order to remove the arbitrary discrimination against Indian settlers in Sikkim, the definition of "Sikkimese" in Section 10(26AAA) ought to be read to include Indians, who had settled there as on 26.04.1975. Therefore, it is prayed to treat the word "means" in the definition of "Sikkimese" as an inclusive one and include Indian settlers within this fold. Reliance is placed on the decision of this Court in the case of Vishundas Hundumal Vs. State of M.P., (1981) 2 SCC 410. 7.2 Learned counsel appearing on behalf of the intervenors has, in addition, also relied upon the Parliamentary Report of the Parliament of India (Rajya Sabha Committee) in the 145th Report dated 06.08.2013 recommending that the ambit of Section 10 (26AAA) of the Income Tax Act, 1961, which exempted "Sikkimese Subjects" from payment of Income Tax should also be extended to all t....
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....to the merger of Sikkim with India and with that of the "Sikkim Subjects" registered under the Sikkim Subjects Regulations, 1961. 9.1 Shri Venkataraman, learned ASG is also not in a position to justify the Proviso to Section 10(26AAA) insofar as it excludes from the exempted category, "a Sikkimese woman, who marries a non-Sikkimese after 01.04.2008". 10. Shri Vivek Kohli, learned Advocate General appearing on behalf of the State of Sikkim has as such supported the objections. 10.1 It is submitted on behalf of the State that the State has no objection if the Proviso to Section 10(26AAA) depriving the right of a "Sikkimese woman" to exemption from payment of Income Tax under Section 10(26AAA) upon her marriage to a non-Sikkimese after 01.04.2008 is struck down and/or is done away with so as to treat them equally in the matter of income tax exemption. 10.2 Now, so far as, the right of the old Indian settlers to pray for the exemption under Section 10(26AAA) of the Income Tax Act is concerned, it is submitted on behalf of the State that the benefit of Section 10(26AAA) has to be extended to all Indian citizens domiciled in the State of Sikkim irrespective of the fact whethe....
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....e settled in Sikkim prior to the merger of Sikkim with India on 26.04.1975 are to be treated at par and they form the same group/class and are entitled to the exemption under Section 10(26AAA) of the Income Tax Act. As such, there is no difference and/or distinction between those "Sikkim Subjects", whose names are recorded in the register maintained under the Sikkim Subjects 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 maintained under the Sikkim Subjects Regulations, 1961. All are "Sikkimese". Merely because at the relevant time and when the Sikkim Subjects 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 Sikkim Subjects Regulations, 1961, by itself, it cannot be said that they cease to be the "Sikkimese". All of them are similarly situated with those "Sikkimese" / "Sikkim Subjects", who all have settled in Sikkim prior to the merger of Sikkim with India on 26.04.1975. As observed above, the object and purpose of Sect....
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....lligible differentia has been shown and therefore, the same can be termed as arbitrary. As observed and held by this Court in the case of Shayara Bano Vs. Union of India, (2017) 9 SCC 1, in India, arbitrariness is not a separate ground since it will come within the embargo of Article 14 of the Constitution. Therefore, any provision, which is arbitrary, discriminatory and violative of Article 14 of the Constitution of India and any classification which is violative of Article 14 of the Constitution of India can be struck down. 14. In view of the above and for the reasons stated above, we are of the firm opinion that Section 10(26AAA) to the extent it excludes the Old Indian settlers, who have settled in Sikkim prior to the merger of Sikkim with India on 26.04.1975, but whose names are not recorded as "Sikkim Subjects", from the definition of "Sikkimese" is ultra vires, being arbitrary, discriminatory and violative of Article 14 of the Constitution of India. The definition of "Sikkimese" in Section 10(26AAA) of the Income Tax Act shall also include all Indians, who have permanently settled in Sikkim prior to the merger of Sikkim with India on 26.04.1975 irrespective of the fact th....
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....ction 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 Article 14 of the Constitution of India. Therefore, also, the Proviso to Section 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. 16. Therefore, Proviso to Section 10(26AAA) inasmuch 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. 17. In view of the above and for the reasons stated above, both these petitions succeed. The exclusion of Old Indian settlers, who have permanently settled in Sikkim prior to merger of Sikkim with India on 26.04.1975 from the definition of "Sikkimese" in Section 10(26AAA) is hereby held to be ultra vires to Article 14 of the Constitution of India and is hereby struck down. It is held that all Indians/old Indian settlers, who have permanently settled in Sikkim prior to the merger of Sikkim with Indi....
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.... reasons assigned during the course of my judgment. If those directions are complied with, the discrimination would be removed. (ii) I agree with the conclusion reached by M.R. Shah, J. to the effect that the proviso in Section 10 (26AAA) of the I.T. Act, 1961 is arbitrary, discriminatory and violative of Articles 14 and 15 of the Constitution of India. I have assigned additional reasons and dealt with the said aspect of the matter in greater detail through the course of my judgment and order. Background facts: 3. Writ Petition (C) No.1283 of 2021 has been filed by the petitioners under Article 32 of the Constitution of India, assailing the validity of the proviso to Section 10 (26AAA) and Explanation thereto introduced to the I.T. Act, 1961 through the Finance Act, 2008 by which Sikkimese (people from Sikkim State) are purportedly exempted from payment of income tax. They have further sought a direction to the respondents to extend the exemption granted under Section 10 (26AAA) of I.T. Act, 1961 to persons such as the petitioners herein. The petitioners have sought a declaration that they are also entitled to exemption from payment of income tax under Section 10 (26....
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....astes by the Constitution (Sikkim) Scheduled Castes Order, 1978; (b) the 'Limbu' and 'Tamang' Communities (earlier notified under 'Central List of Other Backward Classes ' in the year 1995) which got recognised and notified as the Scheduled Tribes in the year 2003 by the Scheduled Castes and Scheduled Tribes Orders (Amendment) Act 2002; (c) the Communities which got recognised and notified for inclusion in the 'Central List of Other Backwards Classes' in the year 1995, namely, 'Bhujel', 'Gurung', 'Manger', 'Kirat Rai', 'Sunuwar', and in the year 1999 namely 'Sanyasi', and in the year 2000 namely 'Jogi'; and (d) the 'Bahun', 'Chettri' and 'Newar' Communities which got recognized and notified in the 'State List of Other Backward Classes of Sikkim in the year 2014. 6. According to the petitioners, the history regarding ordinarily resident 'British Indian Subjects' and the 'Indian Nationals' engaged in trade, commerce and Government employment in the former Kingdom of Sikkim is pluralistic. They comprised of diverse ethnic, re....
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....Union then. (iv) When India became independent in 1947, on the cessation of British Paramountcy from India, the Dominion of India inherited the rights and liabilities of the British Crown vis-à-vis the Indian States as on that date. The Kingdom of Sikkim not being exactly like other Indian States did not accede to the Union of India but had signed a standstill agreement for continuation of its previous relationship pending a fresh agreement with India. In the years preceding the proclamation of Republic of India (i.e. before 26th January 1950), it was agreed that the Kingdom of Sikkim was a Special Protectorate State of Indian Union, having its own separate territory. (v) From 1947 onwards, the Kingdom of Sikkim had continued to allow the British Indian Subjects as well as Indian Nationals to hold Office and employment in the posts and services of the Government Establishment of the Kingdom of Sikkim, i.e. 'Sikkim Darbar'. Such persons of Indian origin serving/appointed in the posts and services of Government Establishment of the Kingdom of Sikkim were referred to as 'Darbar' Employees of British Indian origins and 'Darbar' Employees....
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....ate of Naturalisation to be granted under the aforesaid clauses, the following conditions must be fulfilled: (i) renouncing their Nationality and (ii) changing their allegiance to the erstwhile Kingdom of Sikkim. The result of this pre-condition was that an eligible male British Indian Subject or male Indian National and his wife and minor children had to give up their Indian Nationality (of which country Sikkim was a protectorate since 1950), for the purpose of converting themselves into Naturalized Sikkim Subjects. Although, these Regulations were promulgated, according to the petitioners no differential treatment was meted out to the Indians as their rights were protected under the Indo-Sikkim Treaty of 1950. (d) In 1965, the Chogyal of Sikkim notified the Sikkim Work Permit Rules, 1965, by which all foreigners required a Work Permit to enter, work and stay in Sikkim. Significantly, the term "Foreigner" under the Sikkim Work Permit Rules, 1965, was defined as meaning a "foreigner not being Indian national". Persons of Indian origin were therefore not considered as foreigners in Sikkim and were not required to obtain a work permit irrespective of the fact that they were ....
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....71-F, an Adaptation of Sikkim Laws Order was promulgated wherein, the 1961 Regulation, was repealed w.e.f. 26th April, 1975 by the Order issued on 13th September, 1975. (d) On 9th April, 1981, the Government of Sikkim issued a Memorandum to the effect that: " ... the Governor has been pleased to authorize District Collectors within respective district to issue Certificate to person identifying them in the following groups to enable them to apply for employment in the State- 1. A person whose name is found in the Old Sikkim Subject Register prior to 1975. 2. A person whose name is not found registered in the Old Sikkim Subject Register but he/she has established beyond doubt that the name of his/her father/husband/paternal grandfather /brother from the same father has been recorded in the Old Sikkim Subject Register, or 3, A person who has or had agricultural land in rural areas and has been ordinarily residing in the State of Sikkim or 4. A person whose father/husband has/had been in Sikkim Government service on or before 31.12.1969." (e) In the year 1988, a petition was moved in the Lok Sabha by a few Members of Legisl....
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.... Most of these 73,431 persons included citizens of India and were persons who had permanently settled in Sikkim between 1946 and 1975. It is averred that applications in the prescribed format for inclusion in the Citizenship list in terms of the Sikkim Citizenship (Amendment) Order, 1989, were submitted by the family members of petitioners in W.P. (C) No.1283 of 2021, which was duly acknowledged by the concerned District Collector. However, their names neither appeared in the approved list forwarded by the Ministry of Home Affairs, Government of India nor in the rejected list. 10. The legal and factual developments prior to the introduction of the I.T. Act, 1961, in Sikkim could be encapsulated as under as the controversy in these cases arises under the said Act: (a) In 1948, the Sikkim Income Tax Manual, 1948 (SITM) was promulgated by the Ruler of Sikkim (the Chogyal). Under the SITM, all persons engaged in business were subjected to tax irrespective of their origin. Therefore, there was no difference made out between the original inhabitants of Sikkim, namely, the Bhutia-Lepchas and the persons of foreign origin settled in Sikkim like the Nepalis or persons of Indi....
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.... exemptions to SSC holders and the people who were made citizens of India and their descendants vide the Government of India orders dated 07th August, 1990 and 08th April, 1991. The contention of the Government of Sikkim was that SSC holders and those who became Indian citizens in 1990-1991 vide the Sikkim Citizenship (Amendment) Order, 1989, should be exempted. The Voters' List of 2004 for the State of Sikkim had the following demographic composition: Bhutia-Lepcha (STs) : 20.64% Nepalis : 69.71% (Including the original Sikkim Subjects) Sherpa : 4.31% Others : 5.34% (Old Settlers of Indian Origin: 1.50% and New Settlers including those of Indian Origin 3.84% = 5.34%) (f) In the year 2008, Government of India passed an amendment to the I.T. Act, 1961 by virtue of the Finance Act, 2008, wherein clause (26AAA) was introduced under Section 10 of the I.T. Act, 1961. Clause (26AAA) to Section 10 of the I.T. Act 1961 granted an exemption to Sikkimese people. Thereafter, on 16th June, 2008, the Government of Sikkim issued a Circular stating that the SITM should not be acted upon. Grievance of the petitioners: 11. Acc....
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....ommunicated a decision that it had come to the conclusion that there was no provision in the I.T. Act, 1961, for grant of exemptions to the individuals not included in the Register of Sikkim Subjects. The Committee therefore recommended that the said individuals should approach legal experts/Chartered Accountants to look into the lacunae in the I.T. Act, 1961, for the possible inclusion of their names so that the Government of Sikkim could take up the issue with the Government of India. 14. According to the petitioners, on 21st September, 2010, Government of Sikkim issued a Cabinet Memorandum wherein it was admitted that Certificate of Identification (COI) was issued in view of the still valid pre-merger laws on the subject, as it enjoyed constitutional protection under Article 371-F. The persons such as the petitioners herein by virtue of being COI holders are covered under Rule 4(4) of Sikkim Government Establishment Rules, 1974, for employment under the State Government and its Public Sector Units (PSUs) which has provisions of employment for locals only. 15. According to the petitioners, due to the injustice being meted out to the persons excluded from exemption from paym....
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..../Confdl/111/2013/09part/5992 dated 22nd September, 2018 was issued by the State Government with a directive to the above two categories to furnish details in the prescribed format to the competent authority. It is averred that the persons such as the petitioners in W.P.(C) No. 1283 of 2021 in accordance to the Public Notice dated 22nd September, 2018, have submitted all relevant documents before the competent authority. 20. It is contended that the petitioners are being subjected to continued discrimination and are being assessed to income tax, even though they are also eligible for the exemption under Section 10 (26AAA) of the I.T. Act, 1961. That, in spite of various representations which have been made, the completely discriminatory and arbitrary amendments made to the I.T. Act, 1961 have still not been done away with. In fact, further recovery notices for recovery of tax have been sent to some of the persons who are members of petitioner No.1 Association in W.P. (C) No. 59 of 2013. Therefore, in the above circumstances, being aggrieved by the amendment by which clause (26AAA) to Section 10 of the I.T. Act, 1961 was introduced, the petitioner has invoked Article 32 of the Con....
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....hereinafter referred to as the "Register of Sikkim Subjects"), immediately before the 26th day of April, 1975; or (ii) an individual, whose name is included in the Register of Sikkim Subjects by virtue of the Government of India Order No. 26030/36/90- I.C.I., dated the 7th August, 1990 and Order of even number dated the 8th April, 1991; or (iii) any other individual, whose name does not appear in the Register of Sikkim Subjects, but it is established beyond doubt that the name of such individual's father or husband or paternal grandfather or brother from the same father has been recorded in that register;" Submissions: 22. We have heard Sri K.V. Viswanathan, learned senior counsel appearing on behalf of the writ petitioners in Writ Petition (C) No. 59 of 2013, Ms. Pooja Dhar, learned counsel appearing for the writ petitioners in Writ Petition (C) 1283 of 2021, Sri N. Venkataraman, learned Additional Solicitor General appearing for the Department of Revenue, Union of India, Sri Vivek Kohli, learned Advocate General for the State of Sikkim, and perused the material on record. Submissions of the Writ Petitioners: 23. Learned senior counsel and learned....
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.... on an intelligible differentia which set one group apart from the other. In this regard, it was stated that Sikkim, having merged with India on 26th April, 1975, all residents and subjects of Sikkim, had thereafter become Indian citizens. Therefore, there was no justifiable reason to treat Indian settlers of Sikkim differently from Sikkim Subjects who had all subsequently become Indian citizens. That following the merger of Sikkim with India, and Indian citizenship having been conferred on Sikkim Subjects, the basis for classification had been eroded. That migrants/settlers who had earlier not been registered as Sikkim Subjects, as well as Sikkim Subjects were uniformly considered as Indian residents of Sikkim, after 26th April, 1975, and therefore, both such categories were to be admitted to the benefits of income tax exemption under Section 10(26AAA) of the I.T. Act, 1961. The fact that migrants/settlers had earlier not been registered as Sikkim Subjects on the ground that they failed to surrender their Indian citizenship at the relevant time, would have no relevance after the merger of Sikkim with the India, since such migrants as well as Sikkim Subjects had been placed in the ....
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.... for the writ petitioners that the proviso is violative of Articles 14 and 15 of the Constitution of India. In this regard, it was further contended that a woman, on the mere factum of being married would not lose her identity as a 'Sikkimese.' That gender-based discrimination is ex-facie evident in the proviso, more so, because there is no provision for disqualification of a Sikkimese man from claiming exemption under the Act, on marrying a non-Sikkimese woman after 1st April, 2008. 32. It was submitted that the said proviso could not be traced to any consideration other than that of gender alone and therefore, the same ought to be declared as discriminatory against women. Reliance was placed on Anuj Garg and Ors. vs. Hotel Association of India and Ors., (2008) 3 SCC 1 and G. Sekar vs. Geetha, (2009) 6 SCC 99 to contend that exclusion from the benefits of a provision, on the ground of gender alone, would be liable to be struck down as being violative of Article 14 of the Constitution of India. 33. With the aforesaid averments, it was prayed that the definition of the term 'Sikkimese' as provided for in the Explanation to Section 10(26AAA) of the I.T. Act, 1961, should be rea....
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....ith the aforesaid background, it was urged that the distinction between Sikkim Subjects and other residents of Sikkim, including migrants/settlers of Indian origin, was based on a reasonable classification. 36. It was emphasized that this Court had recognized on previous occasions that Sikkim Subjects formed a group which was distinct from other residents of Sikkim. 37. It was next contended that exemption from payment of income tax could not be granted to the entire population of Sikkim simply because they are domiciled in the State. Therefore, exemption was granted in favour of Sikkim Subjects and such other persons as specified under the Explanation to Section 10(26AAA) of the I.T. Act, 1961, having due regard to tangible social and historical differences between various categories of residents of Sikkim. 38. Those migrants/settlers of Indian origin, who may have been residing in Sikkim prior to the coming into effect of the 1961 Regulation, chose not to get themselves registered as Sikkim Subjects by relinquishing their Indian citizenship. This was a considered choice made by the said class of persons. Having waived their privileges on account of non-registration as Si....
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....ext, the following aspects can be discerned: i) Firstly, it is the contention of the petitioners that Sikkimese women have been subjected to discrimination which is not valid in law, particularly, having regard to Articles 14 and 15 of the Constitution of India. The contention is that there is a discrimination against Sikkimese women while there is no such discrimination as far as Sikkimese men are concerned, in the sense that if a Sikkimese woman marries an individual who is not a Sikkimese, she is excluded from the benefit of the clause but if a Sikkimese man marries an individual who is not a Sikkimese, such an exclusion does not apply. ii) Secondly, it is only Sikkimese women who have married on or after 1st April, 2008 who are excluded from the benefit of the said provision but if any Sikkimese woman was married to a non-Sikkimese prior to 1st April, 2008, there is no such exclusion from the benefit granted under the provision. iii) Thirdly, it is contended that marriage cannot be a basis for a classification between a man and a woman so as to make it discriminatory against a woman. A Sikkimese woman cannot be discriminated against vis-à-vis a....
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....rried to an individual who is not a Sikkimese, and (iii) the marriage having taken place on or after 1st April, 2008. Thus, what emerges is that marriage of a Sikkimese woman is made the basis of classification. Thus, in other words, there is discrimination in the following ways: i) between Sikkimese women who as opposed to Sikkimese men. ii) between Sikkimese women who are married as opposed to those who are not married, and iii) between Sikkimese women who are married to a Sikkimese as opposed to those who are married to a non-Sikkimese, and iv) between Sikkimese women who have married a non-Sikkimese on or after 1st April, 2008, who are not entitled to the benefit of the provision as opposed to those Sikkimese women who are married to a non-Sikkimese prior to the aforesaid date, who are entitled to the said provision. 48. It is further observed that Section 10 (26AAA) was inserted to the I.T. Act, 1961 by the Finance Act, 2008 w.e.f. 1st April, 1990. The proviso although inserted in the year 2008 has a retrospective effect from 1st April, 1990 i.e., the date on which I.T. Act, 1961 was introduced in Sikkim. Prior to 1990, SITM, 1948, was ap....
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....mese or a non-Sikkimese woman on or after 1st April, 2008. Article 14 of the Constitution states that, State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India. Article 15 (1) of the Constitution states that the State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them. In fact, Article 15(3) empathetically states that nothing in Article 15 shall prevent the State from making any special provision for women and children but in the instant case, according to petitioners, instead of the proviso being in favour of Sikkimese women, it is antithetical to Articles 14 and 15 (1) and (2) of the Constitution of India as it is discriminatory against Sikkimese women who have married a non-Sikkimese, that too, after 1st April, 2008. 52. This discussion has also to be viewed in light of the Explanation to Section 10 (26AAA) of the I.T. Act, 1961. The Explanation states that, the term 'Sikkimese' shall mean, an individual whose name is recorded in the Register of Sikkim Subjects immediately before 26th April, 1975, or an individual whose name is included in t....
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....roviso which is impermissible. Thus, the proviso is inherently arbitrary and discriminatory against a particular category of Sikkimese women. In other words, the Explanation to Section 10 (26AAA) of the I.T. Act, 1961 includes both Sikkimese men as well as women. Such being the interpretation, in my view, the proviso is antithetical to the Explanation and the Section as well. 54. The normal function of a proviso is to except something out of the provision or to qualify something enacted therein which, but for the proviso, would be within the purview of the provision. As a general rule, a proviso is added to an enactment to qualify or create an exception to what is in the enactment and ordinarily, a proviso is not interpreted as stating a general rule. In other words, a proviso qualifies the generality of the main enactment by providing an exception and taking out as it were, from the main enactment, a portion which, but for the proviso would fall within the main provision. Further, a proviso cannot be construed as nullifying the provision or as taking away completely a right conferred by the enactment. If it does so and is discriminatory then it falls foul of the equality clause....
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....option as to when to marry is a Fundamental Right under Article 21 of the Constitution of India. However, in the very same case, this Court found the termination of service of a woman employee on her first pregnancy to be shocking as it was an open insult to "Indian womanhood" and hence, the said action was extremely detestable and abhorrent to the notions of a civilised society and therefore, violative of Article 14 of the Constitution. In fact, this Court observed that the rule could be amended so that termination of the services of an employee on her third pregnancy could be permitted which aspect also, in my view, calls for reconsideration in the absence of any qualifying parameters. b) In Air India Cabin Crew Assn. vs. Yeshaswinee Merchant and others, AIR 2004 SC 187, this Court set aside a decision of the Bombay High Court and upheld the early retirement of women employees, namely, Air Hostesses in Air India which was then a Public Sector Undertaking. Justifying its decision, this Court observed that, "there cannot be any cut and dried formula for fixing the age of retirement" and this "would always depend on a proper assessment of the relevant factors and may con....
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....entler of the species. 6. At the first blush this rule is in defiance of Article 16. If a married man has a right, a married woman, other things being equal, stands on no worse footing. This misogynous posture is a hangover of the masculine culture of manacling the weaker sex forgetting how our struggle for national freedom was also a battle against woman's thraldom. Freedom is indivisible, so is Justice. That our founding faith enshrined in Articles 14 and 16 should have been tragically ignored vis-avis half of India's humanity viz. our women, is a sad reflection on the distance between Constitution in the book and law in action. And if the executive as the surrogate of Parliament, makes rules in the teeth of Part III especially when high political office, even diplomatic assignment has been filled by women, the inference of diehard allergy to gender parity is inevitable. 7. We do not mean to universalise or dogmatise that men and women are equal in all occupations and all situations and do not exclude the need to pragmatise where the requirements of particular employment, the sensitivities of sex or the peculiarities of societal sectors or the handicaps ....
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....ould lead to a differentiation between a man and a woman. This Court therefore held that the father, by reason of being conferred a dominant personality, cannot be ascribed to have a preferential right over the mother, in the matter of guardianship, since both fall within the same category and the word 'after' shall have to be interpreted in terms of the constitutional safeguards and guarantee given to gender equality so as to give a proper and effective meaning to the words use. (iv) In Anuj Garg & Ors. vs. Hotel Association of India & Ors. (2008) 3 SCC 1, this Court upheld the right of women to have equal treatment in employment in the hospitality sector. In the said case, the constitutional validity of Section 30 of the Punjab Excise Act, 1914, which prohibited employment of "any man under the age of 25 years" or "any woman" in any part of the premises in which liquor or any intoxicating drug was consumed by the public, was challenged. This Court observed that, when the original Act was enacted, the concept of equality between two sexes was unknown. The makers of the Constitution intended to apply equality amongst men and women in all spheres of life by....
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....kar vs. Geetha & Ors. (2009) 6 SCC 99 this Court observed that, in terms of Articles 14 and 15 of the Constitution of India, the female heirs, subject to the statutory rule operating in that field, are required to be treated equally to the male heirs. This Court further observed that, gender equality is recognized by the world community in general in the human rights regime. (vi) In this context, it would be useful to refer to the following observations made by Altamas Kabir, C.J. in his supplemental opinion in State of Maharashtra vs. Indian Hotel and Restaurants Association, (2013) 8 SCC 519: "147. Women worldwide are becoming more and more assertive of their rights and want to be free to make their own choices, which is not an entirely uncommon or unreasonable approach. But it is necessary to work towards a change in mindset of people in general not only by way of laws and other forms of regulations, but also by way of providing suitable amenities for those who want to get out of this trap and to either improve their existing conditions or to begin a new life altogether. Whichever way one looks at it, the matter requires the serious attention of the State and i....
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....ent. The blanket nonconsideration of women for criteria or command appointments absent an individuated justification by the Army cannot be sustained in law." 60. The fight for non-discrimination based on considerations of gender has assumed centre stage in the United States of America as well. The Fourteenth Amendment to the U.S. Constitution provides that no State shall deny to any person within its jurisdiction, equal protection of the laws. This clause has evolved a body of judicial doctrine which is comprised, inter-alia, in the numerous rulings issued by the United States Supreme Court, that have advanced women's rights. A few of such landmark decisions may be referred to as under: (a) In Reed vs. Reed, 404 U.S. 71, 92 S. Ct. 251 (1971), the question before the Supreme Court of the United States was, whether, a statute, namely, the Idaho Probate Code that included a gender-based provision, preferring males over females to administer an estate, violated the Equal Protection clause of the Fourteenth Amendment of the Constitution. In a unanimous decision, the Court held that the Idaho Probate Code's dissimilar treatment of men and women was unconstitutional and was vi....
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....s. Missouri, 439 U.S. 357, 99 S. Ct. 664 (1979) was whether the Jackson County's practice of automatically exempting women from jury service upon request violated the rights as guaranteed by the Sixth and Fourteenth Amendments. The Court held that the State statute's exemption of women from jury service on request violated the defendant's rights as guaranteed by the Sixth and Fourteenth Amendments in failing to ensure that jurors in criminal cases be drawn from a fair cross section of the community, since it was sufficiently established by the defendant that women, as a group, were distinct from men. The Court further observed that, there existed no significant state interest to justify exemption of women from jury service. (d) In Hishon vs. King & Spalding, 467 U.S. 69, 104 S. Ct. 2229 (1984) the controversy was whether King & Spalding, the law firm where Hishon was employed, violated Title VII of the Civil Rights Act of 1964 (for short, "CR Act, 1964") by unfairly discriminating against Hishon on the basis of her sex by denying her admission to the partnership of the firm. In a unanimous decision, the Court held that Title VII of the CR Act, 1964 made it illegal ....
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...., 1975. This is also clear from the Government Order dated 7th August, 1990 which was notified by the Government of Sikkim to the effect that every person who immediately before 26th April, 1975, was a Sikkim Subject under 1961 Regulation, shall be deemed to have become a citizen of India on that day. In fact, where there were genuine omissions, a direction was issued to enter all such eligible persons who had been omitted in the said Register. To the same effect is the Government Order issued by the Government of India dated 8th April, 1991 which was notified by the Government of Sikkim on the same date. 63. Therefore, on a conspectus consideration of the 1961 Regulation in light of the Government Orders passed subsequent to the merger of Sikkim with India by which Sikkim became a State in India and by which the Sikkim Subjects domiciled in Sikkim had their names included in the Register of Sikkim Subjects, the proviso should not have discriminated against Sikkimese women in the manner analysed above, only because a Sikkimese woman who, though, may have had her name registered in the Register of Sikkim Subjects, married a non-Sikkimese, that too, only on or after, 1st April, 20....
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....of such individual's father or husband or paternal grandfather or brother from the same father has been recorded in that register; 67. Therefore, it is necessary to analyse each of the aforesaid Regulations, Rules, Government of India Orders for the purpose of this case as a challenge is made by the petitioners to the definition of 'Sikkimese' in the Explanation to Section 10 (26AAA) of the I.T. Act, 1961 in respect of the three categories of individuals entitled to the benefit. 68. The first category of individuals are those individuals whose names are registered in the Register maintained under the Sikkim Subjects Regulation, 1961 read with the Sikkim Subject Rules, 1961 ("1961 Regulation" and "1961 Rules" respectively): 68.1. An individual whose name is recorded in the Register of Sikkim Subjects immediately before 26th April, 1975 is a Sikkimese. The same is as per the 1961 Regulation read with 1961 Rules. On a perusal of the 1961 Regulation, which was enacted during the period of the Chogyal in Sikkim, it is noted that Regulation (3) is relevant insofar as these petitioners are concerned. Regulation (3) reads as under: - "3. Certain persons domiciled in S....
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....owing three categories of persons are stated to have domicile in the territory of Sikkim immediately before the commencement of the 1961 Regulation: - (a) a person born in the territory of Sikkim and is resident therein, or (b) has been ordinarily resident in the territory of Sikkim for a period of not less than fifteen years immediately preceding such commencement, or (c) is the wife or the minor child of a person mentioned in clause (a) or clause (b) above. 68.3. The proviso to Regulation (3) states that a person shall not be a Sikkim Subject under Regulation (3) "unless he makes a declaration to the effect that he is not a citizen of any other country at the time of inclusion of his name in the Register of Sikkim Subjects to be maintained under the said Regulation." The said proviso, must now be interpreted in light of the fact that the Kingdom of Sikkim has merged with India with effect from 26th April, 1975 and is an Indian State. When considered in the context of the aforesaid significant fact, the proviso to Regulation (3) would have to be interpreted to mean that an individual who had not made a declaration to the effect that he was not a citiz....
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.... of Sikkim Kingdom with India, the expression "any other country" would not include India as all residents of Sikkim, whether a Sikkim Subject or not are now Indian citizens. But the term 'Sikkim Subject' was defined as a person who was born in the territory of Sikkim and was resident therein and all similarly situated persons, but however, with a caveat that a person shall not be a Sikkim Subject under the 1961 Regulation, unless he made a declaration that he was not a citizen of any other country at the time of inclusion of his name in the Register of Sikkim Subjects. The result of this caveat was that an Indian citizen whose ancestors had settled down in Sikkim for generations, had to give up his citizenship of India (of which country Sikkim was a protectorate since 1950), for the purpose of registering himself as a Sikkim Subject. However, though these Regulations were promulgated, no differential treatment was meted out to the Indians as their rights were protected under the Indo-Sikkim Treaty of 1950. 68.6. Thus, although, as per the 1961 Regulation read with the 1961 Rules, the name of the individual had to be registered before 26th April, 1975 in the Register of ....
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....f India. Therefore, Indian citizens or Indian nationals who became domiciled in Sikkim and were employed in Sikkim did not require a work permit. In view of the aforesaid Rules, it can be inferred that any Indian citizen who entered Sikkim for the purpose of employment prior to 26th April, 1975 was treated on par with Sikkimese and not as a foreigner. It is plausible that because of the concession given under Work Permit Rules of 1965, Indian citizens or nationals did not get themselves registered under the Register of Sikkim Subjects at the relevant point of time. 68.9. It is contended that only a small percentage of settlers of Indian origin in Sikkim have not been registered under the Register of Sikkim Subjects and as a result they are not provided the benefit of exemption under the Explanation to clause (26AAA) of Section 10 of the I.T. Act, 1961. In the circumstances, the respondent-Union of India must consider ways and means in which such persons could also receive the benefit of exemption from payment of income tax if they were domiciled in Sikkim on or before 26th April, 1975 by amending the Explanation to Section 10 (26AAA) of the I.T. Act, 1961 or by issuing a circula....
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....nt of Sikkim, it was declared that 16th May, 1975 was the date on which the Citizenship Act, 1955, shall come into force in the State of Sikkim and the Citizenship Rules, 1956, were also enforced from the aforesaid date. In fact, in exercise of the powers conferred under Section 7 of the Citizenship Act, 1955, the Government of India promulgated the Sikkim (Citizenship) Order, 1975. As per clause (2) of the aforesaid order: "Every person who immediately, before the 26th day of April, 1975, was the Sikkim Subject under the Sikkim Subjects Regulation, 1961 shall deem to have become a citizen of India on that day". Further, in exercise of the powers conferred by Section 7 of the Citizenship Act, 1955, the Government of India amended the Sikkim Citizenship Order, 1975, by virtue of the Sikkim Citizenship (Amendment) Order, 1989, whereby a proviso was added to paragraph 2 of the Sikkim (Citizenship) Order, 1975, which reads as follows: "Provided that any person whose name was eligible to be entered in the register maintained under the said regulation but was not so entered because of any genuine omission shall also be deemed to have become a citizen of India on that....
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....cluded in the Register of Sikkim Subjects. The Ministry of Home Affairs, Government of India after consideration of the cases found that 33,348 persons were eligible to be registered under the Register of Sikkim Subjects and were deemed to have become citizens of India with effect from 26th April, 1975, in terms of the Sikkim (Citizenship) Order, 1975. 69.4. By virtue of the aforesaid Government Orders dated 7th August, 1990 and 8th April, 1991 it is clear that persons who were entitled to be registered in the Register of Sikkim Subjects immediately before 26th April, 1975 but were not registered because of genuine omissions, are to be registered in the said Register by virtue of the said Government Orders as citizens of India and entitled to the benefit of the exemption. Thus, all individuals who were registered in the Register of Sikkim Subjects became citizens of India by virtue of the aforesaid Government of India's orders. Therefore, it was a necessary concomitant that to become a citizen of India, an individual must have been/be registered in the Register of Sikkim Subjects. Further registration under the said Register enables such individuals to have the benefit of exe....
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.... in the Register of Sikkim Subjects but it is established beyond doubt that the names of such individual's father or husband or paternal grandfather or brother from the same father have been recorded in that Register, could also be included in the said Register. Hence, even as of now, if any individual's name is not entered in the Register, such individual's name could be entered into the Register by virtue of clause (iii) of the Explanation to Section 10 (26AAA) of the I.T. Act, 1961. The object of providing clause (iii) of the Explanation, which is in the nature of an omnibus clause, is to extend the benefit of the exemption under Section 10 (26AAA) of the I.T. Act, 1961 to all Sikkimese as per the conditions mentioned therein by providing individuals whose names do not appear in the Register, an opportunity of getting their names registered in the said Register so as to avail the benefit of exemption from payment of income tax as per the aforesaid provision. 72. Thus, the object is to provide the exemption from payment of income tax only to those Sikkimese who were domiciled in Sikkim having regard to the 1961 Regulation or by virtue of the Government Orders dated 7th August,....
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....domiciled in Sikkim as on 26th April, 1975 and who have since then become citizens of India. This would mean that all other citizens of India who do not fall within the ambit of the Explanation as interpreted above and who have been domiciled in Sikkim State subsequent to 26th April, 1975 would not have the benefit of exemption under Section 10 (26AAA) of the I.T. Act, 1961. 76. In view of the above interpretation, in my view, the Explanation has to be saved from being in violation of Articles 14 or 15 of the Constitution of India as there is rationale in the three clauses of the Explanation which is a reasonable classification which has a nexus to the object sought to be achieved, which is to grant of exemption from payment of income tax only to those individuals who would qualify as 'Sikkimese' in terms of the Explanation to clause (26AAA) of Section 10 of the I.T. Act, 1961. Thus, any individual not falling within the said clause would not be entitled to the said exemption. This would however be discriminatory insofar as those settlers in Sikkim are concerned who have been domiciled in Sikkim subsequent to promulgation of 1961 Regulation and till 26th April, 1975 when Sikkim ....
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....sion would extend the benefit of exemption to those individuals, domiciled in Sikkim on the day it merged with India, i.e., 26th April, 1975. 79. In the result, the writ petitions are disposed of in the following terms: i) That the benefit of income-tax exemption presently is restricted only to those Sikkimese who fall within the three clauses of the Explanation to Section 10(26AAA) of the I.T. Act, 1961, or those persons domiciled in Sikkim, or are Sikkimese as covered under the 1961 Regulation. ii) In terms of the Sikkim (Citizenship) Order, 1975 as amended by the Sikkim (Citizenship) Amendment Order, 1989, issued by the Government of India any person who was a Sikkim Subject under the 1961 Regulation was to be deemed to be a citizen of India w.e.f. 26th April, 1975. Conversely, it is held that all citizens of India, having a domicile in Sikkim on the day it merged with India i.e. 26th April, 1975 must be covered under the Explanation in order to avail the benefit of the exemption under Section 10(26AAA) of the I.T. Act, 1961. iii) The Union of India shall make an amendment to Explanation to Section 10 (26AAA) of I.T. Act, 1961, so as to suitably inc....