Expansion Of Definition Of 'Sikkimese' In S.10(26AAA) Of Income Tax Act Doesn't Affect Rights Of Indigenous People: Sikkim High Court
The Sikkim High Court has upheld the constitutional validity of the definition 'Sikkimese' under the Income Tax Act, which was slightly expanded by way of an amendment in terms of the Finance Act, 2023.
A division bench of Chief Justice Biswanath Somadder and Justice Meenakshi Madan Rai upheld the vires of Explanation (v) contained under clause (26AAA) of section 10 of the Income Tax Act, 1961.
The initial definition excluded from the definition Indians who had settled in Sikkim prior to the State's merger with India on 26th April, 1975. However, following the Supreme Court's decision in Association of Old Settlers of Sikkim and Others Vs. Union of India (2023), Explanation (v) included those not domiciled in the State on or before the cut-off date but whose father or husband or paternal grand-father or brother from the same father was domiciled.
It is challenging this expansion that the Petitioner, a designated Senior Advocate, preferred a PIL. It was contended that the amendment is in violation of Article 371F(k) of the Constitution which grants special status to Sikkim and provides that the existing laws, customs, and rights of the Sikkimese people shall be respected and preserved by the Parliament.
Petitioner argued that it is the responsibility of the State to ensure protection of the old laws and that inclusion of Explanation (v) undermines the sanctity of the rights and privileges reserved for genuine indigenous people under Article 371F.
Rejecting this contention, the High Court observed that the term “Sikkimese” defined for the purpose of Section 10(26AAA) is only for the purpose of Income Tax Act, 1961 and not for any other purpose.
“In that view of the matter, we do not find that this clarification or explanation touches upon the sanctity of the rights and privileges reserved for genuine indigenous Sikkimese which are carefully preserved and protected under Article 371F (k) of the Constitution of India,” it said.
The Court also noted that the very genesis of the amendment was a Supreme Court judgment which held that the exclusion of old Indian settlers, who had permanently settled in the State prior to its merger with India, is unconstitutional.
As such, the challenge was dismissed.
Appearance: Dr. Doma T. Bhutia, Petitioner-in-Person. Ms. Sangita Pradhan, Deputy Solicitor General of India for respondent No.1 Mr. Zangpo Sherpa, Additional Advocate General with Mr. S. K. Chettri, Government Advocate for respondent No. 2.
Case title: Dr. Doma T. Bhutia v. Union Of India & Another
Case no.: WP (PIL) No. 01/2025
