The arguments in the writ petition challenging the constitutionality of Section 139AA of the Income Tax Act (IT Act) continued for the fourth day today. This provision mandates individuals to link their Permanent Account Number (PAN) with their 12 digit unique number, Aadhaar on or before 1 July 2017. A summary of the previous three days’ arguments can be found here.
The Attorney General (‘AG’) commenced arguments on behalf of the Central Government today. At the outset, he protested that the petitioners’ arguments were squarely on the issue of privacy, which is pending consideration before a larger bench, and therefore, should not have been raised. On Section 139AA specifically, he explained that the validity of a legislation could only be challenged on two grounds – legislative competence and infringement of the Constitution. He argued that besides these two, there was no ground available to the petitioners to assail the validity of s. 139AA.
On legislative competence, it was argued that Articles 246 and 248 of the Constitution, read with List I Entries 82 and 97 allowed the Parliament to enact the provision under challenge.
Violation of Rights Enshrined under the Constitution
On this ground, it was argued that paying income tax by its very nature was coercive. As a result, the challenged provision could not violate Article 19. Further, he contended that the issue of taxation did not trigger Article 21. Viewed within a broader context, the object of taxation was to ensure an orderly society and provide benefits to individuals. Although coercive, it is ultimately used for peoples’ benefit, and therefore the state is entitled to legislate to ensure orderly collection of taxes.
The Attorney General then proceeded to give a background to the introduction on PAN. He explained that Section 139A, that mandates PAN for filing income tax returns, was inserted into the IT Act in 1975. It was introduced to provide a unique identity to tax payers and ensure orderly collection of taxes.
Essentially, the crux of the Attorney General’s arguments was that Aadhaar was a more robust and effective replacement/supplement to the existing identification mechanism under the Act. He responded to the petitioners’ claim of fingerprints being an invasion of bodily integrity by arguing that there was no absolute right to one’s body. United States’ Supreme Court decisions were cited to substantiate this proposition, including the landmark decision Roe v. Wade. The AG also relied on Section 32A of the Registration Act 1908, which mandates fingerprints of buyers and sellers of immovable property. Further, the legal requirement to participate in the population census, and register births and marriages were used by him to contend that individuals could not choose to remain invisible to the state. The state had an interest in identifying everyone. The only real difference between these mandatory provisions and s. 139AA, he contended, was that due to technological advancement, fingerprints under the Aadhaar scheme were stored digitally and in a readable format. He stated that the entire argument on privacy and bodily integrity ‘was bogus’ as privacy intrusions such as body scans at airports were now a part of contemporary life.
On the petitioners’ grounds that s. 139AA was a violation of the Supreme Court’s interim orders in the main challenge to the Aadhaar, he reiterated that it is not a ground for striking down legislation. He argued that the orders had been passed when there was no statute regulating Aadhaar. The interim orders could not bar the Parliament from enacting a statute, irrespective of any undertakings given by officers of the Government (including the AG himself). He also argued that assuming that the interim orders were subsequently vacated after s. 139AA had (hypothetically) been struck down, the conclusion would be unjust. Even in the context of Vishakha v. State of Rajasthan, orders were pronounced with the understanding that they were interim in nature and would only operate till legislation was enacted.
Additionally, in the AG’s view, the context of the interim orders was limited to the usage of Aadhaar for welfare schemes or benefits. Use of the unique number for taxation purposes was never contemplated by the interim orders.
Responding to the petitioners’ argument that Aadhaar couldn’t be made mandatory under the IT Act while it was voluntary under the Aadhaar Act, it was argued that the latter was not the ‘parent’ legislation as had been claimed and did not derive authority from the former. Most importantly, it was argued that Aadhaar was not voluntary, as the petitioners had argued. As per the Central Government’s interpretation of Section 7 of the Aadhaar Act, services could not be denied only to those who had enrolled but not yet been *assigned* an Aadhaar number. Therefore, enrolment was mandatory. Further, Section 57 made usage of Aadhaar for other purposes permissible.
Responding to the petitioners’ argument on the first day that the statute was arbitrary, it was again stated that arbitrariness was not a ground on which an Act of Parliament could be struck down. For this proposition, reliance was placed on State of Madhya Pradesh v. Rakesh Kohli and Rajbala v. State of Rajasthan, amongst others.
The AG also explained to the Court the rationale and technological aspects of the Aadhaar project, and the need for mandating it for income tax returns. He made some tall claims about the robustness of the Aadhaar framework, arguing that it is the most robust system of identification and is completely fool proof. This, in his opinion was essential to weed out the duplicate PANs, which was allowing individuals and companies to launder money, generate black money and finance terror, among other things. Putting a stop to such activities would enable the government to efficiently collect tax and utilize it for public benefit. He explained the process of de-duplication, that is, the process of ensuring uniqueness by checking each set of biometrics against all the entries within the database. This, he argued would ensure that even if an individual obtained an Aadhaar with fraudulent credentials, this fake identity would be ‘locked on’ to him, as the fingerprints would be unique. He also claimed that it was impossible for an individual to obtain two Aadhaar numbers and that this had never happened. He brought to the Court’s notice that Aadhaar had enabled the Central Government to save more than Rs. 50,000 crore. However, no authority was cited to substantiate this figure.
Responding to recent reports of Aadhaar numbers being put out in public domain, the AG stated that the leaks were not from UIDAI’s central repository and that even in those instances, it was irrelevant that Aadhaar numbers were on display as the biometrics were secure.
A recurring theme in the AG’s argument was reliance on theories of social contract. He argued that individuals did not live in vacuum, but were in fact members of society. As a result, the state’s role is to regulate this society through policy and legislation. Individuals could not expect essential services such as roads, electricity and policing from the state, without an obligation to pay taxes. This obligation extended to complying with the state’s procedure for payment of taxes as well. He argued that there was no right to be forgotten against the state as ‘the state does not want to forget you’. Justice Sikri responded to this argument stating that even within a social contract, obligations had to be balanced with individuals’ liberty and dignity.
The AG summed up his arguments citing a World Bank report on the importance of having an identity and its impact on citizens. He argued that wanting to be ‘forgotten’ was a luxury of the rich, as the poor actually wanted an identity. In his view, Aadhaar helps fulfil this by providing an identity to the identity-less.
Tomorrow, the Centre is likely to continue arguments on the issue of Article 14 being violated. The petitioners are likely to respond to the arguments advanced by the Centre today.