New Delhi, Feb 8.
The Supreme Court on Wednesday removed all references made in a recent judgement to “foreign origin” Nepalis of Sikkim, in deference to ruffled feathers in the state over its observations. The top court’s reference to this in a Jan 13 ruling had created a storm in the state.
The protests had prompted the central government to file a review in the case. The state government had backed the review.
A two-judge bench comprising Justices M.R. Shah and B.V. Nagarathna, which had passed the Jan 13, 2023 judgement, deleted the reference in deference to sentiments of the people of the state who had protested against it across party lines.
The top court had in its ruling said that no difference could be made under the Sikkim Income Tax manual, 1948, in granting Income Tax exemption to all old settlers in the state across ethnic groups and communities.
Prior to this, the tax exemption excluded “old Indian settlers”, who had permanently settled in Sikkim before the merger of the state into the Indian union on April 26, 1975. The Association of the Old Settlers of Sikkim had challenged the constitutional validity of the definition of the term Sikkimese under Section 10 (26AAA), on this ground.
Acting on its plea, the bench, comprising Justices Shah and Nagarathna, had directed the state government to amend the explanation to Section 10 (26AAA) to include a clause to extend the exemption to all Indian citizens domiciled in Sikkim on or before April 26, 1975.
“All persons engaged in business were subjected to tax irrespective of their origin,” the bench said.
“Therefore, … no difference could be made between original inhabitants of Sikkim, namely, the Bhutia-Lepchas, and the persons of foreign origin settled in Sikkim like the Nepalis or persons of Indian origin who had settled down in Sikkim generations back,” it had said.
Migrants from other countries or erstwhile kingdoms like the “Nepalese migrants”, who “migrated to and settled in Sikkim at the same time or even after migrants/settlers of Indian origin”, were benefiting from Section 10 (26AAA) of the IT Act, 1961, “while arbitrarily excluding settlers of Indian origin…,” it had noted.
The court also struck down a proviso — Section 10 (26AAA), which excluded Sikkimese women who had married non-Sikkimese men after April 1, 2008, from the benefit of tax exemption — as violative of Articles 14, 15, and 21 of the Constitution. This discrimination did not exist prior to the state joining the Indian union.
Unfortunately, the court’s reference to persons of foreign origin settled in Sikkim like the Nepalis in the judgement did not go down well in the state.