Legislative definitions within a fiscal statute, when explicitly limited to taxation matters by administrative clarification, do not infringe upon broader constitutional rights or indigenous protections, provided the amendment is designed to ensure equity in tax relief and lacks application outside the fiscal scope.

JUDGMENT :

BISWANATH SOMADDER, CJ.

1.This writ petition has been filed by a designated Senior Advocate, Dr. Doma T. Bhutia, as a Public Interest Litigation (PIL), challenging the vires to Explanation (v) contained under clause (26AAA) of section 10 of the Income Tax Act, 1961, which was introduced by way of amendment in terms of the Finance Act, 2023, insofar as it deals with the definition of the term, “Sikkimese”. According to the writ petitioner, this amendment to the definition of the term “Sikkimese” under section 10 clause (26AAA) of Explanation (v) of the Income Tax Act, 1961, by the Finance Act of 2023, is in violation of Article 371F (k) of the Constitution of India. According to the writ petitioner, it is the responsibility of the State of Sikkim to ensure protection of the old laws including its preservation/protection as provided under Article 371F (k) of the Constitution of India, in public interest.

2. Without narrating or going into the details of other pleadings, as sought to be made by the writ petitioner, this Court is of the view that the crux of the matter which is sought to be raised by the writ petitioner in the instant Public Interest Litigation is required to be looked into and seen from an objective standpoint.

3. We find that the genesis of the amendment which was introduced in terms of the Finance Act, 2023, is a judgment of the Hon’ble Supreme Court of India, rendered in the case of Association of Old Settlers of Sikkim and Others Vs. Union of India and Another along with Rapden Lepcha and Others Vs. Union of India and Another , reported at (2023) 5 SCC 717. That judgment was passed on two writ petitions filed before the Hon’ble Supreme Court under Article 32 of the Constitution of India. One was Writ Petition (C) No. 59 of 2013, Association of Old Settlers of Sikkim and Others Vs. Union of India and Another. The other writ petition, being Writ Petition (C) No. 1283 of 2021, Rapden Lepcha and Others Vs. Union of India and Another. In the two writ petitions, the writ petitioners prayed for issuance of an appropriate writ, direction or order, striking down section 10 (26AAA) of the Income Tax Act, 1961, more particularly, the definition of “Sikkimese” as contained in section 10 (26AAA) to the extent it excludes Indians who have settled in Sikkim prior to the merger of Sikkim with India on 26^th April, 1975. The petitioners also prayed before the Hon’ble Supreme Court for an appropriate writ, order or direction striking down the proviso to section 10 (26AAA) of the Income Tax Act, 1961, insofar as it excludes from the exempted category, “Sikkimese woman”, who marries a non-Sikkimese after 01^st April, 2008. The Hon’ble Supreme Court dealt with the matter at length and delivered a judgment discussing the issues brought before it and disposed of both the writ petitions in the following terms:-

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148.1. That the benefit of income tax exemption presently is restricted only to those Sikkimese who fall within the three clauses of the Explanation to Section 10(26-AAA) of the IT Act, 1961, or those persons domiciled in Sikkim, or are Sikkimese as covered under the 1961 Regulations.

148.2. In terms of the Sikkim (Citizenship) Order, 1975 as amended by the Sikkim (Citizenship) Amendment Order, 1989, issued by the Government of India any person who was a Sikkim Subject under the 1961 Regulations was to be deemed to be a citizen of India w.e.f. 26- 4-1975. Conversely, it is held that all citizens of India, having a domicile in Sikkim on the day it merged with India i.e. 26-4-1975