Less than a month after it said nothing prohibited the government from making Aadhaar mandatory for non-welfare purposes, the Supreme Court on Friday questioned the Centre for making the unique biometric identity card a must for filing of tax returns and obtaining PAN. “How can you make Aadhaar card mandatory when we have passed an order to make it optional?” a bench led by justice AK Sikri asked attorney general Mukul Rohatgi. Rohatgi had earlier said that mandatory seeding of PAN numbers with Aadhaar — done through the latest Finance Bill which inserted Section 139AA of the Income Tax Act — was a “legislative mandate”. He also recalled that the apex court had made Aadhaar mandatory for procuring SIM cards to check misuse and protect national security.
The AG also drew the court’s attention to the fact that Parliament passed the Aadhaar Act in March 2016 to give it legal backing. A three-member bench headed by Chief Justice JS Khehar on March 28 reiterated that disbursements of assorted government subsidies and doles cannot be strictly Aadhaar-linked, but said that there was no bar on linking of non-welfare schemes to Aadhaar. It also expressed its ability to set up a wider constitutional bench to decide the fundamental question of privacy at this juncture.
The bench headed by Sikri said it would hear arguments on the plea challenging the government’s move making Aadhaar mandatory for PAN cards on April 25. The apex court had in September 2013 said that Aadhaar was not necessary for availing essential services and, in August 2015, while asserting this, restricted its use to PDS and LPG schemes. It, however, had said the privacy issue would need to be decided by a constitutional bench. After the SC allowed voluntary use of Aadhaar in welfare schemes like MGNREGS, PM Jan Dhan Yojana, LPG and PDS, the government has considerably strengthened its Aadhaar payment bridge and a third of payments under the direct benefit transfer (DBT) schemes are already disbursed using it.
However, the government cannot deny a citizen these benefits for her not having Aadhaar even though vast majority of Indians already have the ID. Rohatgi argued that fake PANs and ration cards have flooded the market and jinxed financial transactions. “We found a number of PAN cards being used to divert funds to shell companies. To prevent that (from happening) the only option is to make Aadhaar card mandatory,” the AG told the apex court. “A person can get multiple PANs in the names of Mukesh Gupta, then another PAN as Mukesh Kumar Gupta and a third one as MK Gupta, so on and so forth,” the AG explained the leaky nature of identity proofs now.
Rohatgi further said that Aadhaar is voluntary only with respect to availing social service schemes. The court was hearing two different petitions, one by SG Vombatkere, a retired Indian Army officer, and the other by former Kerala minister and CPI leader Binoy Viswam. The petitions challenged the constitutionality of Section 139AA inserted in the Income Tax Act, 1961, by the Finance Act, 2017. The provision makes Aadhaar mandatory for filing income tax returns from assessment year 2017-18. Possession of an Aadhaar card is necessary for obtaining PAN and continued validity of an existing PAN.
One of the petitioners contended that the Aadhaar Act itself does not make obtaining Aadhaar mandatory. The object of Income Tax Act is to levy tax on the income earned by a person and to provide a mechanism for payment and collection of the same. According to them, parting with biometrics has no rational nexus to the said object and creates a wrongful classification among a homogeneous group of taxpayers.