Can a person who is voluntarily a part of a tax regime choose to say he will pay his taxes only in the certain way he wants to? Does he have a right to choose?
“Yes, it is my right to choose a career. It is my right of choice to be a transgender. But away from these societal rights, when a citizen is part of a tax regime, can you say that I will pay taxes only the way I want to do it... Is there a right of choice in the limited context of tax laws?” Justice A.K. Sikri, who heads the Bench also comprising Justice Ashok Bhushan, asked.
The question from the Supreme Court came even as the petitioners claimed that the mandatory linking of Aadhaar to PAN under the newly-included Section 139AA of the Income Tax Act is a “direct invasion” by the state into the citizens’ right to make free, voluntary and informed consent.
Critics argued in the Supreme Court that Section 139AA is a “chilling trajectory the State has taken to dilute civil liberties.”
“It completely takes away your political and personal choices. You are a dog on an electronic leash, tagged and tracked. Your progress hobbled,” senior advocate Shyam Divan, representing a petitioner, submitted.
The government, represented by advocate Arghya Sengupta, quoted American jurist Oliver Wendell Holmes Jr. to say that “taxes are the price we pay for an orderly society.”
Mr. Sengupta argued that after Aadhaar cards at 113.7 crore, voter ID cards are the most produced at 60 crore, revealing the number of people who want to be accounted for in the system.
He said Aadhaar was foolproof as PAN was in 1975. “Biometric technology is the best system in 2016,” Mr. Sengupta submitted.
‘Ensures equality’
The government said Aadhaar, rather than causing inequality, bolstered equality between honest taxpayers and those who had till now evaded tax.
Mr. Divan rebutted by taking on the court’s pointer that there was no individual freedom of choice when it came to tax laws formed by the state, in this case Section 139AA.
Judicial review
He said Section 139AA was hardly a fiscal statute. Instead, it definitely invited judicial review and interpretation.
“Section 139AA engrafts the entire machinery and procedure used in Aadhaar Act. Section 139AA is a direct invasion of fundamental rights using the Aadhaar Act, which is a non-fiscal law,” Mr. Divan argued.
Direct collision
He submitted that there was indeed a direct collision between the voluntary nature of the Aadhaar Act of 2016 and Section 139AA which made it mandatory for a person to possess an Aadhaar card to file income tax returns and continue to have a valid PAN.
Attorney-General Mukul Rohatgi had argued that the Aadhaar Act is “in a way mandatory” and there was no disparity between the statute and Section 139AA.
Mr. Divan pointed out that a citizen is “entitled” and not “obliged” under the Aadhaar Act to obtain an Aadhaar card to access certain benefits. He pointed to several provisions of the Aadhaar Act which mandate that the enrolling authority should first inform the citizen about how and where biometric details collected from him would be used.
“Informing a citizen thus means that his prior consent is implicit. Do you see the same in Section 139AA?” asked Mr. Divan.
No punishment
Most importantly, he submitted that the voluntary nature of the Aadhaar Act was clear from the fact that there was no punishment prescribed against people who opt not to take Aadhaar.
He referred to the website of the Unique Identification Authority of India (UIDAI) itself to point out that the “very creature of Aadhaar statute says it is voluntary”.
He said over 1.6 lakh Aadhaar cards had been cancelled. Crores of Aadhaar enrolments were done by private parties before the Aadhaar Act came into existence in 2016. The same private enrollers were used even now.
“Aadhaar enrolment is a gravy train for private entrepreneurs. Data collected is used commercially,” Mr. Divan submitted, pulling out a list of them accessed from the UIDAI website.
He read out the names of some of the private entrepreneurs to whom citizens give their most intimate personal imprints, including a “philanthropic club” from Odisha to the proprietor of an establishment called ‘Bits and Bytes’ in Mumbai.
“Indian citizen should have his day in court. Please pass appropriate interim orders against Section 139AA,” Mr. Divan concluded.
