A Sikkimese woman who marries a non-Sikkimese man granted Rights by Supreme Court

Association of Old Settlers of Sikkim filed a writ petition against Union of India praying for an appropriate direction or order to strike down Section 10(26AAA) of the Income Tax Act. They also prayed for an appropriate direction or order challenging the Proviso to Section 10(26AAA), excluded from exempted category, “a Sikkimese woman, who marries a non-Sikkimese after 1st April 2008.” The Supreme Court stated that the exclusion of old Indian settlers, who had permanently settled in Sikkim prior to the merger of Sikkim with India on 26th April 1975, is unconstitutional as per the definition of “Sikkimese” in Section 10(26AAA) of the Income Tax Act, 1961. The bench (including Justice M R Shah and Justice B V Nagarathna) stated that “old Indian settlers, irrespective of whether their name is recorded in the register maintained under Sikkim Subject Regulations, 1961, read with Sikkim Subject Rules, 1961 or not are entitled to the exemption under Section 10(26AAA) of the Income Tax Act.”

It is the case on behalf of the writ petitioners that the exclusion of old Indian settlers who were settled in Sikkim prior to the merger of Sikkim with India on 26th April 1975 and consequently not granting the exemption granted under Section 10(26AAA) of the Act, 1961 to the class of Indians, who have settled in Sikkim prior to the merger of Sikkim with India on 26th April 1975 is arbitrary, discriminatory and the differentia do not have a rational nexus to the object sought to be achieved by the statute. Also, Proviso to Section 10(26AAA), insofar as it excludes from the exempted category is discriminatory and violative of Articles 14, 15, and 21 of the Constitution of India as exclusion is based on gender.

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The top Court highlighted that the Union of India shall make an amendment to Explanation to Section 10 (26AAA) of IncomeTax Act, 1961, so as to suitably include a 116 clause to extend the exemption from payment of income tax to all Indian citizens domiciled in Sikkim on or before 26th April 1975. Moreover, the Apex Court stated that any individual whose name does not appear in the Register of Sikkim Subjects but is established that such individual was domiciled in Sikkim on or before 26th April 1975, shall be entitled to the benefit of exemption. The statement “a Sikkimese woman who marries a non-Sikkimese man after 1st April 2008” was struck down as being ultra vires Articles 14, 15, and 21 of the Constitution of India. The writ petition was further disposed of.   

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