BY Garima Bana.
In 2000, the Government of India was faced with a tremendous problem of citizens having either no identification proof or fake and multiple identification documents such as passports, Permanent Account Number (PAN) and voters’ ID card. Such a situation was considered a grave threat to national security considering its geography and cross-border transfers, and an uphill task for the government to reach out to every person, in particular to the rural areas with government benefit programmes.
To tackle this problem, the Government of India through the Planning Commission vide notification dated January 28, 2009, rolled out the Unique Identification Scheme UIDAI popularly known as the “Aadhaar”. Its aim was to allot every citizen of India irrespective of its caste, class or gender with a unique 12-digit identification number after recording their biometric and demographic data in a systemic manner. It was considered to be the largest national identification programme in the world considering the population of India. This magnanimous endeavor of the Government of India hit a roadblock when the constitutional validity of Aadhaar was challenged by a batch of petitions in the Supreme Court of India in 2012.
In a nutshell, the fundamental challenge faced by Aadhaar in the court was that of it being violative of the Right to Privacy and self-autonomy under Article 21 of the Indian Constitution. Article 21 protects a person’s life and dignity. Over the years through numerous precedents, Article 21 has developed in it many other ancillary and supplementary rights necessary for a person to live his life with dignity, the right to privacy also being one of them. In spite of various judgments of the apex court on privacy, it was argued by the government that the nature, extent and the legal position of the right to privacy was uncertain and doubtful, which left the court with no option but to refer it to a larger constitutional bench of the Supreme Court under Article 145(3) as it involved a substantial question of law as to the interpretation of the Constitution.
While referring this matter, the court found it suitable to pass interim orders. In a nutshell, the interim order directed the government to not make Aadhaar enrolment mandatory for availing government benefits and at the same time no person should be deprived of any government schemes in the absence of Aadhaar. In 2016, the Government of India tabled a legislation to provide statutory recognition to the Aadhaar scheme with promulgating the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (hereinafter referred to as the ‘Aadhaar Act’).
Further, in 2017, the government tabled the Finance Act, 2017 in the parliament which added section 139AA to the Income Tax Act, 1961. Section 139AA made Aadhaar mandatory for a person to apply for a PAN and mention his Aadhaar number while filing his annual income tax returns, non-compliance of which would invalidate the PAN as well as all transactions of an assessee retrospectively from the date of application of PAN. The effect of this provision was far-reaching and severe as after 01 July 2017 every person who desired to obtain a PAN card or pay his annual taxes would need an Aadhaar number. Several petitions were filed in the apex court challenging the vires of Section 139AA of the Income Tax Act, 1961.
CRITICAL ANALYSIS
The petitioners’ arguments challenging the constitutional validity of Section 139AA were pivoted primarily on legislative competence, Article 14, Article 19(1)(g) and Article 21. As the validity of Aadhaar under Article 21 was already sub judice in front of a constitutional bench, petitioners were left with two options: it could allow the court to bunch the present petition with the matter already pending in front of the constitutional bench or could argue the matter without touching upon the right to privacy under Article 21. Being aware of the fact that the court was showing no urgency in making a constitutional bench and the perils of leak of biometric and demographic data, it chose to adopt the latter course and proceed with arguing the instant case without touching upon the right to privacy and other facets under Article 21. In effect, the challenge to Section 139AA was restricted to Article 14, Article 19(1)(g) and legislative competence of the Parliament to enact Section 139AA of the Income Tax Act, 1961.
The primary contentions advanced by the petitioners were threefold. Firstly, petitioners argued that the Parliament of India was barred from enacting any law which made Aadhaar compulsory as it would nullify the interim order of the Supreme Court. It could only have done so by removing the basis of the order of the court. They relied upon Ram Jawaya Kapoor v. State of Punjab which had held that under the scheme of our constitution executive and legislative powers are coextensive and it cannot be said that a decision of the court based on an executive action is less or not binding on the legislature. It was also vehemently pleaded that the Parliament was restricted to pass contrary laws and it was the duty of the court to read down the subsequent enactment in case both the laws could not be harmoniously construed.
In the present instance, Section 139AA was in conflict with the primary Aadhaar Act which itself never made Aadhaar enrolment mandatory. The court replied to both the arguments in the negative stating that the previous interim order of the court was directed when Aadhaar was only an executive scheme. Such an interim order could not be binding on the legislature to pass a law. Further, the court held that both the laws were not in conflict with each other as both laws operated in different fields with different objects to accomplish, Aadhaar Act operating in the field of government subsidies and Section 139AA operating in the field of Income Tax and curbing black money. The court held that it is the complete prerogative of the Parliament to make one statute mandatory and another directory.
The second primary issue raised by the petitioner was that Section 139AA was in violation of Article 14 of the Indian Constitution. Article 14 enshrines in it the principle of equality and equal protection of laws. A catena of judgments has held that the principle of equality of law under Article 14 does not mean that the same law should apply to everyone but that a law should deal alike with all in the same class, which is there should be an equality of treatment under equal circumstances. No law can be said to be unconstitutional if classification is intelligible and reasonable and further the classification has a real and rational nexus with the object sought to be achieved by the law in question. The arguments of the petitioners were stressed on the second limb of Article 14 that classification under Section 139AA had no rational nexus with the object sought to be achieved which was to curb black money and duplication of PANs. The argument was premised on the fact that the distinction created between companies and individuals, and requiring only the latter to acquire and submit their Aadhaar would not achieve the object of curbing black money and eliminate duplication of PANs. The court replied to this by stating that the Parliament was at liberty to adopt various measures to deal with the problem of black money and duplication of PANs. It opined that if one such measure is to mandate individuals to link their Aadhaar, it cannot be denounced and invalidated because of the reason that the purpose would not be achieved in totality. The court was of the view that the law had a definitive object and the Parliament was apt in targeting the menace of black money in an incremental manner.
The third and final contention of the petitioners was pivoted on Article 19(1)(g) of the Constitution of India. The petitioners argued that the proviso to sub-section (2) of Section 139AA which contains the consequences of failure to intimate the Aadhaar number were severe and draconian in nature and further disproportionate. The invalidation of PAN of individuals like lawyers, doctors, architects and businessmen would lead to a complete civil death and it would be impossible to carry out any business or professional activity under Rule 114B of the Income Tax Rules 1962. Invalidation of PAN would also prevent any individual from operating their bank accounts, debit cards and purchasing any immovable or movable property. In a nutshell, the argument was premised on the basis that the proviso to Section 139AA sub-clause (2) infringed their fundamental right to carry on business and profession enshrined under Article 19(1)(g). The petitioners relied upon Modern Dental College & Research Centre & Ors. v. State of Madhya Pradesh to submit that while applying the test of proportionality under Article 19, the state were categorically required to demonstrate that there was no alternative less invasive measure (narrow tailoring) and that the limitation placed on the constitutional right under Article 19(1) were reasonable qua the object of the law and necessary in a democratic society like ours.
The court in response chose not to delve into a strict scrutiny of the penal provision vis-à-vis the test of proportionality but at the same time declared a partial stay on retrospective and penal consequences of not linking Aadhaar to the PAN under Section 139AA because of its severity till the aforesaid provisions and the Aadhaar itself were considered on the touchstone of Right to Privacy under Article 21. The court in conclusion held that every person who has enrolled themselves under the Aadhaar would comply with the requirements of Section 139A of the Act and those who still want to enroll could do so voluntarily. However, those individuals who do not possess an Aadhaar and cannot comply with the provisions of Section 139AA, their PAN would not be invalidated till the judgment of the constitutional bench was rendered. The court in its final arguments declared the law to be constitutional under Article 14 and Article 19 subject to it passing the test of Article 21.
CONCLUSION
Since 2012 the government of India has found itself fighting tooth and nail in the court over the implementation of the Unique Identification Scheme and the actual battle is yet to start in front of the constitutional bench of the Supreme Court of India. Although the consequences of it are still being discoursed by the legal minds, this judgment has given the government a substantial victory due to the ambiguous nature of the words used in the operating part of the judgment which would allow the government to interpret it to its best interest. A significant development from this judgment is that the interim orders passed earlier are not binding on any legislative action related to Aadhaar.
This judgment would not prevent the current government which enjoys a clear-cut majority in the lower house of the Parliament to enact any provision such as Section 139AA of the Income Tax Act that makes linking of Aadhaar mandatory. However, the court has stated that Section 139AA will still have to pass the more stringent test under Article 21 of the Constitution. With no urgency shown by the apex court to constitute a larger constitutional bench to validate Aadhaar on the touchstone of Article 21 and with already 1.15 billion people enrolling under the Aadhaar Scheme, a judgment of this nature would only further allow the government to embed Aadhaar deeply into the economic system, making it awfully difficult for the courts and government to root it out in case it does not stand the test of Judicial Review. Therefore, amid reports of possible leaks of Aadhaar information and lack of proper infrastructure to safeguard the biometric and demographic data of the citizens, it is in the best interest of the nation that the matter is heard at the earliest.