Supreme Court Upholds Law Linking Aadhaar With PAN

The Supreme Court delivered its judgment in the constitutional challenge to Section 139AA of the Income Tax Act today. Brought in by way of an amendment in April this year, this provision made it mandatory for all taxpayers to quote their Aadhaar number when applying for a Permanent Account Number (PAN) and for filing returns of income. Failure to link one’s PAN with Aadhaar would automatically invalidate the former.


It is important to recall that this amendment was passed at a time when several petitions challenging the constitutionality of the Aadhaar project continue to be pending before the Supreme Court. Through various interim orders, the Court has repeatedly directed that Aadhaar must remain voluntary till the petitions are conclusively decided. In 2015, a three-judge bench felt that there was some ambiguity in the Supreme Court’s jurisprudence on the right to privacy (which the petitions rely on), and referred the matter to a larger bench. This bench is yet to be constituted. These orders were passed before the Parliament passed the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act in 2016 (Aadhaar Act). With the passage of the Aadhaar Act, the status of the interim orders has been put in question, with the government claiming that it is free to mandate Aadhaar for any service or benefit.

In the context of the Aadhaar-PAN petitions, the pending reference on the issue of privacy is important as it severely curtailed the grounds for challenge available to the petitioners. Forced to give up arguments on privacy, the submissions in this case were largely limited to the issue of bodily integrity and the right to equality. Arguments were also made on the grounds that the introduction of Section 139AA of the Income Tax Act violates Articles 14 and 19 of the Constitution of India.

However, in its judgement today, the Court has construed privacy extremely broadly. The Court excluded all arguments made on bodily integrity, dignity and the right to informational self-determination, on the basis that these concepts are linked to privacy.


The Court upheld s. 139AA(1), making it mandatory for taxpayers to quote their Aadhaar while filing returns of income. However, for existing PAN holders who are not yet enrolled and do not have an Aadhaar number, the proviso under s. 139AA(2) has been stayed till the Constitution Bench decides the pending writ petitions challenging Aadhaar. This stay would not benefit those who have already obtained an Aadhaar number.

The Court justifies this partial stay on the ground that the consequences for non-compliance are severe, and individuals should not be made to suffer till the main matter attains finality.

The Court also read down the proviso to s. 139AA(2) which creates a legal fiction by which non-linking of the PAN with the Aadhaar number would result in penal provisions under the Income Tax Act applying ‘as if the person had not applied for the allotment of the PAN’. The Court held that these provisions could only apply prospectively.


I. Legislative Competence

a) Legislature lacked authority to pass a law contrary to judgments of the Supreme Court (the interim orders) without removing its basis – The court held that these orders were passed in the absence of any statutory scheme (and hence, lacked a basis). Further, it held interim orders could not preclude the Parliament from passing such a law.

b) Aadhaar Act itself was voluntary, and therefore, s. 139AA could not indirectly make it mandatory – The Court categorically holds that enrolment under Aadhaar is voluntary. However, it leaves open the question whether the government could make the number mandatory for receipt of benefits under Section 7, observing that is was squarely within the ambit of the pending writ petitions.

The Court went on to reject the contention the legislature could not make Aadhaar mandatory under s. 139AA, holding that the purpose behind the statute was entirely different from that of the Aadhaar Act. It accepts the efficacy of Aadhaar in solving stated objectives such as money laundering and black money based solely on the Parliament’s wisdom.

II. Article 14

It was argued that s. 139AA drew an arbitrary distinction between assesses who were individuals and others such as partnership firms, companies and trusts etc. as the latter were not required to obtain an Aadhaar number. Excluding juristic entities such as companies would fail to address the government’s stated objectives of weeding out fake cards and curbing black money.

The Court outlined the twin tests under Article 14 – that there must be a reasonable classification founded on intelligible differentia and this must have a rational nexus with the object sought to be achieved. It rejected the contention that mandating Aadhaar only for individuals could not achieve the desired purpose. What is surprising is that in reaching this conclusion, the Court accepts without question, the efficacy of Aadhaar to successfully de-duplicate PAN cards. This is despite the fact that the petitioners brought to light several instances of private enrollers mismanaging data and the cancellation of lakhs of cards for biometric and other errors.

III. Article 19(1)(g)

The petitioners had argued that the penal consequences associated with non-compliance were draconian and completely disproportionate, affecting individuals’ rights to carry on their business or profession. In dealing with the submission on proportionality, the Court focused on s. 139AA(2), which prescribes the penalty for non-compliance. The Court observed that several routine activities in course of any business required PAN. It held that invalidating one’s PAN would restrict the freedom to carry on trade enshrined under Article 19(1)(g). The Court then undertakes a lengthy discussion on the objective of Aadhaar to determine the reasonableness of the restriction.

The Court’s analysis in this section is astonishing. Without having presented any evidence to support or deny such a claim, the Court observes that failure to identify beneficiaries is ‘one of the main reasons’ for leakages in subsidies. (In fact, researchers have repeatedly questioned and de-bunked this assertion). The Court also fails to note the RTI reply cited by the petitioners, pointing out that 99.7% of persons enrolled for Aadhaar already had two other identity proofs. The judgment also makes bald assertions, referring to Aadhaar as the ‘most advanced and sophisticated infrastructure’, and hints at its use ‘to take care of problem of terrorism to some extent’ and also to check ‘crimes and also help investigating agencies in cracking the crimes’. It is worth pointing out that it is exactly this sort of mission creep that makes Aadhaar an extremely worrisome project.

The Court holds that it is the prerogative of the legislature to make penal provisions for violating a law, but does not explicitly comment on the reasonableness of the restriction.


Limiting the relief to those who have not yet enrolled for Aadhaar is questionable for two reasons:

  1. As per the government’s submissions, 98-99% of the adult population already has an Aadhaar number, and therefore this decision only protects a miniscule minority of the population. Additionally, limiting relief to those who have managed to remain outside the system overlooks the fact that many were coerced to enrol (as essential services or benefits were made contingent on it). It also overlooks that instances of data leaks came to light only recently, prompting several citizens to have second thoughts about the project only after they had enrolled. But most importantly, the judgment ends up protecting only those who are privileged enough to not depend on the state for benefits and services, and have thus managed to remain un-enrolled.
  2. Rejecting the Article 14 challenge, the Court had held that there could be no distinction between assesses who had ‘voluntarily’ enrolled for Aadhaar, and those who hadn’t or did not wish to. The legal regime had to apply uniformly to all individual assesses, it held. It is perplexing then for the Court to make the same distinction at the time of the final order, without any cogent reasons.

However, despite the limited relief, there is a silver lining in this judgment – the Court observed that it had not addressed any of the objections based on Article 21 of the Constitution, and the statute was being upheld subject to Aadhaar passing this ‘more stringent test’. At several places, the judgment makes note of these ‘important’ issues and hopes for their proper adjudication.

The judgment also notes the petitioners’ concerns regarding data leaks and observes that appropriate measures to address this are essential.

Disclosure: The author assisted the petitioners’ (Maj. Gen. Vombatkere and Mr. Bezwada Wilson) lawyers on specific occasions during the course of the hearing.

Linking PAN with Aadhaar – Update from the Supreme Court Hearing (Day – VI)

The arguments in the writ petition challenging the vires of Section 139AA of the Income Tax Act continued for the sixth (and final) day today. The counsel for Mr. Binoy Viswam continued his rejoinder submissions today. A summary of arguments made over the last five days can be found here.

During the course of his initial arguments, Mr. Viswam’s counsel had contended that s. 139AA ought to be struck down as it violated several interim orders of the Supreme Court directing that Aadhaar be voluntary. In its response, the Central Government had argued that there could be no injunction or estoppel against the Parliament’s power to legislate. Today, Mr. Viswam’s counsel clarified that he was not disputing the Parliament’s sovereignty. His contention was that as long as the interim orders stood, s. 139AA could not have been enacted. He further stated that the Parliament could have ‘removed the basis’ of these orders when drafting the legislation, but had chosen not to.

In response, Justice Sikri stated that the instant case was different as there was no statutory scheme at the time of the interim orders, implying that were was no ‘basis’ that could or should have been removed. He asked if there was any authority to support the proposition. The petitioners’ counsel informed the bench that there wasn’t and that the Court would be deciding this issue for the first time.

On further prodding from the bench about the basis of the interim orders, the counsel responded that they were in the nature of mandamus to ensure that the scheme remained voluntary. In the bench’s view, the writ of mandamus was issued to only the Executive, and not the Parliament. However, it was submitted that once the Supreme Court had passed an order, Parliament was not at liberty to override it, keeping its binding nature in mind. He contended that the sanctity of judicial orders must be maintained, and a judgment could only be overridden by ways known to law. As an analogy, he pointed out the Supreme Court’s ruling banning selling of alcohol along highways. He argued that states could only overcome the judgment by de-notifying highways, and not by merely allowing sale of liquor irrespective of the Court’s judgment. This, in his view amounted to removing the basis of the judgment. Coming back to Aadhaar, he contended that the only way to remove the basis would have been to make Aadhaar mandatory under the Aadhaar Act itself.

Terming the Parliament’s action as dichotomous, he argued that when voluntary under the Aadhaar Act, Parliament had no competence to make it mandatory by s. 139AA. Justice Bhushan appeared unconvinced, and stated that both statutes operated in different domains. The petitioner’s counsel conceded, but argued that this still created a clash that must be rectified. Notably, he argued that s. 139AA did not begin with a non-obstante clause (that is, a clause to the effect that an action could be mandated notwithstanding any other law or judgment). The same Parliament could not confer a right to obtain Aadhaar and simultaneously impose it as a duty. That, he argued, would lead to absurd results.

On the Central Government’s argument that proportionality should not be read into Article 14, the counsel clarified that his argument on proportionality was limited to the statute not having a rational nexus with the object sought to be achieved – that is, to eradicate black money.

He went on to explain the statistics put forth by the government with respect to increased PAN cards. He pointed out that post 1998, PAN was made an essential requirement to obtain mobile phone connections and debit/credit cards, leading to a sharp increase in the number of PANs. This, he argued, did not make the increased numbers ‘sinister’. He also pointed out that the statistics showed that the extent of duplication was minimal. Therefore, the Government had little basis to mandate Aadhaar to de-duplicate PANs when there were no figures or studies conducted to examine the extent of the problem. He reiterated that the consequence of making Aadhaar mandatory were draconian, and consequently disproportionate. This, he argued, violated individuals’ right to practice their trade or profession, enshrined under Article 19(1)(g) of the Constitution, and was not a reasonable restriction under Article 19(6).

He concluded his arguments by quoting Willian Douglas on the need to remain vigilant to protect civil liberties. He prayed for the Court to either strike down s. 139AA or at least strike down the proviso, which attached penal consequences for non-compliance. As an alternate submission, he prayed that the Court make linking Aadhaar mandatory only for those who had enrolled.

With the conclusion of the arguments, the Court reserved its judgment.

Linking PAN with Aadhaar – Updates from the Supreme Court (Day V)

The arguments in the case challenging the constitutionality of s. 139AA of the Income Tax Act (IT Act) continued for the fifth day today. Summaries of arguments advanced on the first four days can be accessed here. Today, the Central Government concluded its submissions and the petitioners commenced their rejoinder arguments.

Due to the Attorney General’s unavailability, the Central Government as well as the Unique Identification Authority of India (UIDAI) were collectively represented by two counsels for today’s hearing.

The Government advanced arguments on two grounds raised by the petitioners during their submissions –

  1. Violation of Article 14 of the Constitution
  2. Informational self-determination

Violation Article 14 of the Constitution

On Article 14, two main arguments were advanced. The first was that proportionality was not a facet of Article 14, and should not be read into the Article in the instant case. The second argument advanced was that in any case, on facts, there was no Article 14 violation. An important facet of the second argument, subsequently advanced by the second counsel was that inclusion of Aadhaar into the tax regime actually helped secure Article 14 rights, or the right to equality. India had a progressive tax regime, which in itself was an important aspect of equality under Article 14. It was argued that weeding out duplicate PANs to end corrupt practices would eliminate the discrimination against honest tax payers as against those abusing the system.


The first argument advanced was that proportionality was not a facet of Article 14 under our constitutional scheme. To decide proportionality of a legislation would amount to the Court substituting its wisdom in place of the legislature. It was argued that the issue of proportionality only arose in a context where a restriction needed to be balanced with a right of if different rights were required to be balanced. Article 14 did not contemplate any such balance and therefore, the issue of proportionality did not arise.

                  No violation of Article 14 on merits

With respect to the second argument, it was argued that the penalty imposed by the legislature could not be struck down on proportionality. This was because s. 139AA did not impose any new penalty and the consequences would be the same as if an individual did not quote their PAN for tax returns. The counsel revisited the AG’s argument that the purpose of PAN was also to provide a unique identity. Further, it was also submitted that an enactment cannot be struck down on reasonableness or arbitrariness. Rajbala v. State of Haryana was again cited for this proposition. Citing the Mardia Chemicals judgement, Justice Sikri suggested that in certain circumstances, the ground of arbitrariness may be available.

On the argument that s. 139AA lacked a rational nexus with the object of controlling black money as it only affected individuals and not companies, the Union’s response was that the enactment never purported to solve the problem completely. The Government would probably devise other methods for tax evasion and money laundering done through companies or trusts. A sealed envelope, with details of ongoing investigations was handed over to the bench to impress upon it the extent of tax fraud perpetuated by individuals. However, the bench refused to take a look at it.

The bench appeared convinced regarding the intelligible differentia between individuals and legal persons but quizzed the counsel regarding the discrimination between willing enrollees of Aadhaar and those who objected to the scheme. To this, the Union’s response was that the object of the scheme was not to discriminate, as it only sought de-duplication of PAN and not seeding of Aadhaar numbers. The counsel further argued that ‘conscientious objectors’ should actually be considered as offenders of the law, notwithstanding any good or moral justifications for not wanting to comply. If being a conscientious objector was seen as a standard for discrimination, most laws would be considered discriminatory.

Informational Self-Determination

With respect to informational self-determination, three arguments were advanced – that the right was not absolute, that the right was an inherent facet of privacy (which could not be argued before this Court) and that the right could not be imported into Indian jurisprudence as is, due to peculiarities of the Indian context.

The counsel argued that even in Germany, where the right emerged, it was not absolute. In India, all fundamental rights envisaged restrictions. Quoting Daniel Solove’s seminal paper titled Conceptualizing Privacy, he further argued that informational self-determination was intrinsically linked to privacy. Lastly, he submitted that German conceptions of privacy were markedly different and warned against directly borrowing solutions from one jurisdiction to another, without context. The counsel cited R. Rajagopal v. State of Tamil Nadu to emphasise that the right to be let alone was a part of privacy rights, which prompted Justice Sikri to frame the issue as that of choice. He asked the petitioners if they had any right to pay taxes in the manner they desired.

In conclusion, the counsel argued that biometrics were the most sophisticated technology for de-duplication in this day and age. Under Section 70 of the Information Technology Act, the central repository which stored biometrics had been designated as a Critical Information Infrastructure, ensuring additional security for it.

At 2:30 pm, shortly after the court reassembled after the lunch break, the petitioners began their rejoinder arguments. On behalf of (Retd) Maj. Gen Vombatkere and Mr. Wilson, the following arguments were made –

  1. The counsel emphasised on the petitioners’ background and their contribution to the state as well as civil society. He reiterated their grave concerns about the state’s efforts to constrain their freedom. He specifically pointed out Mr. Wilson’s work with manual scavengers and how biometrics have repeatedly failed for those engaged in manual labour. The exclusion due to biometric failure made this a real civil rights issue, rather than an elite concern as the AG had claimed.
  2. He reiterated his argument that the scheme of the Aadhaar Act was in collision with s. 139AA as the former was voluntary and the latter was not. In response, the AG had tried to reconcile this contradiction by arguing that even under the Aadhaar Act, enrolment was mandatory. The petitioners’ counsel argued that this was wrong, and proceeded to attack the premise of this argument by showing how the entire scheme of Aadhaar was voluntary. He relied on –
  • Section 3 of the Aadhaar Act, which creates an entitlement in favour of a resident, but poses no obligation to obtain an Aadhaar.
  • Further, Section 7 of the Act only applied to subsidies or benefits. He argued that it was a narrow provision and could not be extended to situations such as tax collection.
  • Section 8 of the Aadhaar Act contemplates seeking consent, again pointing towards the voluntariness of the scheme.
  • He then referred to the enrolment form appended as a Schedule to the Aadhaar (Enrolment and Update) Regulations 2016. The form clearly stated that Aadhaar enrolment is ‘free and voluntary’.
  • Additionally, citing Regulation 6 of the Aadhaar (Authentication) Regulations 2016, he pointed out how consent was an inherent aspect of the enrolment process. There could be no consent to a mandatory scheme.
  • Further, Section 57 of the Act, on which the AG had relied to show that Aadhaar could be used for purposes other than subsidies or benefits, also contemplated informed consent by making a reference to Section 8. He contended that the nature and character of Aadhaar was essentially voluntary, and therefore, tax payers could not be compelled to enrol for it.
  • The lack of any coercive action or penalty under the Act for failing to enrol.

The petitioners’ counsel also relied on representations made on the UIDAI website and the advertisements put out by UIDAI reaffirming its voluntariness. He proceeded to argue that to claim otherwise would be to defraud the public. Since instrumentalities of the state could not defraud the citizenry, their representations as to the voluntary nature of Aadhaar must be taken to be true and s. 139AA should be struck down on this ground alone.

He went on to reference a report from today’s newspaper about new-borns being required to enrol for Aadhaar even before they were assigned a name. In his view, the insistence on tracking individuals from birth showed signs of a totalitarian state, capable of destroying any individual social or political choice.

He also assailed the Central Government’s argument that biometric authentication was secure and sophisticated. He explained how it was possible to forge fingerprints using a photograph or Fevicol.

On the contention that Aadhaar leaks by government portals were distinct from the main centralised database being compromised, he contended that from the citizen’s point of view, the lapses were made by the state. The citizens’ personal information was in public domain irrespective of where the lapse occured.

On compelled speech, he clarified that the issue was not limited to parting with biometrics or iris scans, but a compulsion to give information to a private third party, 34,000 of whom had been blacklisted. The architecture, he argued, was deeply flawed. Based on the Government’s contention that personal information was required to be supplied for purposes such as Census and registration of property, he responded that these were vastly different. These were localized, retained by one authority and for a narrowly tailored purpose. Under the Census Act, there were restrictions on sharing the information, including a prohibition on using the information in a court of law. (Author’s note – the Aadhaar Act allows information stored in the centralised database to be used for court proceedings pursuant to a judge’s orders)

He also debunked the Centre’s claim that Aadhaar was an identity for the identity-less, by citing RTI replies from UIDAI pointing out that less than 0.03% of the total number of people enrolled lacked any previous form of identification.

Finally, on legislative competence, he argued that despite wide residuary powers, there were implied limitations on the state’s power to legislate with respect to an individual’s body, barring narrowly tailored circumstances. Viewed this way, s. 139AA was not a fiscal statute, where the state enjoyed wide latitude to legislate.

The counsel for Mr. Binoy Viswam commenced arguments shortly before the court rose for the day. His arguments will continue tomorrow, after which the matter is likely to be reserved for judgment. A summary of his arguments made today and tomorrow will be collectively posted after tomorrow’s hearing.

Linking PAN with Aadhaar – Update from the Supreme Court Hearing (Day – IV)

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.

Legislative Competence

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.

Linking PAN with Aadhaar – Update from the Supreme Court Hearing (Day – III)

In the on-going case challenging the constitutionality of Section 139AA of the Income Tax Act (‘IT Act’), the petitioners concluded their arguments today. Our coverage of the arguments made over the last two days can be found here and here.

Today, the petitioners’ counsel elaborated on the concept of informational self-determination, as propounded by the German Federal Constitutional Court in the landmark Census decision of 1983.[1] Relying on three scholarly pieces[2], he explained that informational self-determination stemmed from the fundamental rights of human dignity and personal liberty. Collectively, these two rights formed the constitutional right to personality under the German legal framework. Informational self-determination was therefore not just a necessary condition for the free development of one’s personality, but also an essential element of a democratic society. He argued that irrespective of whether this was a constitutional value under the Indian framework, it was a legitimate value and concern for the petitioners before the Court.

The petitioners, and others who object to the Aadhaar project must have the right to informational self-determination to not give their personal information to private entities empanelled by the Government. The counsel argued that UIDAI’s enrolment process was through a network of private entities and reiterated that more than 34,000 had been blacklisted for various reasons. This, in his view established the lack of control exercised by the government during the enrolment process. Further, he relied on UIDAI’s Handbook for Registrars[3] to show that even registrars (who may be state governments, or other public or private entities) are at liberty to retain biometrics and use them for other purposes. In his view, this represented a complete destruction of personal autonomy. He argued that the IT Act could not compel him to part with his biometrics under such circumstances.

The second main ground advanced by the petitioners’ counsel was ‘compelled speech’ as a violation of Article 19(1)(a). He distinguished giving demographic information to government authorities for a singular, defined purpose from information collection under Aadhaar. As per him, the state could not compel an individual to provide fingerprints and iris scans to private third parties. He cited Bijoe Emanuel v. State of Kerala (1986) 3 SCC 615 in support of this contention.

On proportionality, it was argued that the number of PAN cards for individuals (as per the Central Government’s figures) was 29 crore. When seen against the government’s figures for duplicates, this would only amount to 0.4% of all PANs. On the other hand, the intrusion caused by enrolling for Aadhaar would be tremendous.

The petitioner’s counsel reiterated his argument on the legislature lacking competence to enact Section 139AA. He stated that the doctrine of eminent domain was limited to land and could not be extended to one’s body, except under narrowly tailored circumstances under legitimate circumstances. Therefore, the legislature lacked competence under Entry 82 of List I or any residuary power to enact a statute compelling parting with such intimate information.

While summing up, he also reiterated the argument on voluntariness, relying on Lord Atkin’s dissent in Liversidge v. Anderson (1942 AC 206) to emphasise that voluntary could never be interpreted as mandatory.

Finally, he urged the Court to strike down Section 139AA of the IT Act, or alternatively, read down the mandatory nature of the provision to make it voluntary. He also suggested that if the bench thought issues such as informational self-determination and compelled speech are too intertwined or if it appeared not appropriate to decide this matter independently, they may be referred to a larger bench. However, considering the irreversible consequences created by the 1st July deadline, he pressed for interim relief to stay the application of the Act or restrain the government from taking coercive steps for non-compliance. He added that protecting against invalidating one’s PAN would also be essential.

A third petition, which was subsequently filed, was also argued in Court today. The counsel for this petitioner (Mr. Dashrathbhai Patel) contended that Section 139AA was a ‘confused, self-defeating and self-destructive’ provision. He pointed out that the Explanation to the section assigned meanings to several terms as per their definitions under the Aadhaar Act. In such a circumstance, borrowing the definition of ‘enrollemt’ from the Aadhaar Act (where it was a voluntary exercise), made it impermissible to make it mandatory under the IT Act. Secondly, it was contended that the definition of demographic information under the Aadhaar Act specifically prohibited collecting information related to income. By linking PAN with Aadhaar, Section 139AA was facilitating the convergence of income information, in direct contradiction with the Aadhaar Act. He argued that what was impermissible directly could not be permissible in an indirect manner.

With this, the petitioners concluded their arguments before the Supreme Court today. The Central Government will respond on 2nd May (Tuesday).


Disclosure: The author assisted the petitioners’ (Maj. Gen. Vombatkere and Mr. Bezwada Wilson) lawyers for today’s arguments.

[1] BVerfGE 65, 1.

[2] Bernd R. Beier, Genetic Testing and the Right of Self- Determination: The Experience in the Federal Republic of Germany 16(3) Hofstra Law Review 601-614 (1988); and Susanne Baer, Dignity, Liberty, Equality: A Fundamental Rights Triangle of Constitutionalism 59(4) University of Toronto Law Journal 417-468 (2009); Gerrit Hornung and Christoph Schnabel, Data protection in Germany I: The population census decision and the right to informational self-determination 25(1) Computer Law & Security Report 84–88 (December 2009).

[3] p. 16

Linking PAN with Aadhaar – Update from the Supreme Court Hearing (Day – II)

The petitioners resumed their arguments in the case challenging the constitutionality of Section 139AA of the Income Tax Act (‘IT Act’). This provision mandates individuals to link their Permanent Account Numbers (PAN) with their Aadhaar number. The background to the case and our report from yesterday’s hearing can be found here.

The counsel for Maj. Gen. Vombatkere and Mr. Bezwada Wilson continued his arguments today. Today’s hearing commenced with pointing out that despite the government’s assurances, the Aadhaar framework was extremely porous and ineffective. That 34,000 enrolment agencies have been blacklisted was pointed out to substantiate this claim. It was also pointed out that biometric technology itself is fallible – instances of a hacker successfully copying the German Defence Minister’s fingerprints and Angela Merkel’s iris scans were also pointed out. Further, replies to RTI queries showed that more than eighty-five lakh Aadhaar numbers had been de-activated due to biometric and demographic errors discovered later. The counsel also apprised the bench of Aadhaar numbers being issued to dogs, trees, chairs and ‘Coriander s/o pulao’. Pertinently, he outlined concerns about Aadhaar data being leaked by several state and central government portals. These facts were brought to the Court’s attention to emphasise that the petitioners were conscientious objectors to the Aadhaar project and had serious apprehensions regarding its robustness, among other issues.

With the court’s permission, the counsel then revisited the Supreme Court’s interim orders in the main challenge to Aadhaar. He pointed out that due to the reference order, and the difficulties associated with forming a large bench, the case had essentially been ‘canned’ or ‘put in deep freeze’. However, he emphasised that at each stage, judges had been conscious of the gravity of issues involved and had consequently protected citizens with strong interim orders. This was done to protect individuals’ interest and prevent a situation of fait accompli. Particularly with respect to the order passed on 15 October 2015, it was pointed out that the Central Board of Direct Taxes was also a party before the Court in that interim order.

The counsel highlighted the graveness of the issues involved. If allowed, Aadhaar was likely to fundamentally alter the relationship between the citizen and the state and put every citizen on an ‘electronic leash’, enabling real-time surveillance. The Attorney General objected to this line of argument, contending that issues of privacy must not be raised in this case, in light of the pending reference.

On the issue of Section 139AA specifically, it was prayed that the provision must either be struck down or read down to make it voluntary. The submission was that the scheme of the Aadhaar Act was purely voluntary – it created a right to enrol for Aadhaar, but imposed no duty to do so. Reading sections 3 and 7 of the Act, he argued that in addition to being purely voluntary, the only detriment could be the denial of a benefit or service. Since paying tax was neither, one could not be compelled to part with their biometrics. He also argued that the Act and the enrolment process contemplated free and informed consent. When viewed in this light, the mandatory nature of Section 139AA was in direct collision with the scheme of the Aadhaar Act. Justice Bhushan interjected pointing out that the scheme of both statutes was different, and that made the legislation under challenge permissible. To this, it was submitted that a voluntary scheme could not be grafted onto the IT Act as a mandatory provision.

To support this contention further, it was contended that converting a right into a duty amounted to a colourable exercise of legislative power. Further, being coerced to enrol for a scheme that is essentially voluntary negates consent, rendering the legislation unworkable.

The petitioners’ counsel then apprised the Court regarding the penal consequences that would arise in the event of non-compliance with Section 139AA. These included higher Tax Deducted at Source (TDS), a penalty for failure to furnish income and a fine of Rs. 10,000 for not possessing a PAN card. Further, disabilities associated with not having a PAN under Section 114B were reiterated. On being queried by the bench whether PAN being mandated was the same as any other alternative (such as Aadhaar), it was argued that Aadhaar was intrusive to an unprecedented level. PAN, on the other hand, was not intrusive to one’s body. Routine transactions such as opening a bank account or purchasing a motor vehicle should not me made contingent on parting with biometrics.

The bench also quizzed the petitioners on the issue of giving up biometrics for passports and other similar circumstances. The counsel responded distinguishing such circumstances, arguing that in certain limited situations, such identification might be legitimate and necessary. This would be different from Aadhaar, where biometric authentication would become ubiquitous. Other circumstances would include identifying prisoners. Additionally, such information would be stored locally and only used for a limited purpose.

It was also argued that under Section 30, the Aadhaar Act itself defined biometrics as sensitive ‘personal’ data or information. Reference was also made to Section 43A of the Information Technology Act to emphasise that ‘personal’ information is of, and belongs to a person. Being intimate parts of the body, biometrics could not be considered a dominion of the state. Reliance was also placed on On Jurisprudence by Salmond and the Oxford Handbook on Jurisprudence and Philosophy of Law to highlight that the right of bodily integrity included ‘exclusive possession and use of his or her own body as against everyone else’. The petitioner’s counsel went on the state that the Indian Constitution does not establish a totalitarian state but creates a state that is respectful of individual liberty and freedoms. Drawing from the preamble and emphasizing on the idea of a limited government, he said that the Indian Constitution is ‘not a charter of servitude’.

The petitioner’s counsel took the Court through a host of judgments for the proposition that the right to life extended to a right to protect one’s body and identity from harm. He cited landmark judgments such as National Legal Service Authority v. Union of India and Others (2014) 5 SCC 438 and Sunil Batra v. Delhi Administration and Others (1978) 4 SCC 494 to emphasise that personal liberty went beyond mere animal existence. He also touched on the context of bodily integrity, informed consent and self-determination as essential facets of Article 21, read with Articles 14 and 19.

As a final argument, it was argued that the object of the statute itself was discriminatory. Section 139AA discriminates between a homogenous class of assessees – individuals willing to part with biometrics to enrol for Aadhaar and those who’re unwilling to do so. The provision unreasonably discriminates against the latter by subjecting them to grave penal consequences, given that both categories are willing tax payers. A voluntary scheme could not, and should not deprive individuals of their choice.

The petitioners’ counsel also briefly touched upon the concept of ‘informational self-determination’ and argued that the state did not have any imminent domain regarding one’s body. Parting of sensitive features such as biometrics should be subject to one’s control and consent.

Arguments on behalf of the petitioners are likely to be concluded tomorrow. The Attorney General, representing the Central Government, is likely to advance arguments on Tuesday (May 2).

Linking PAN with Aadhaar – Update from the Supreme Court Hearing (Day – I)

The petitions challenging the constitutionality of Section 139AA of the Income Tax Act (‘IT Act’) came up for hearing before the Supreme Court today. Section 139AA makes it mandatory for individuals to quote their Aadhaar number when applying for a Permanent Account Number (PAN) as well as to file income tax returns. Section 139AA(2) stipulates that failure to intimate the Aadhaar number would automatically invalidate one’s existing PAN. Further, not linking the two also creates a legal fiction by which the provisions of the Act would apply ‘as if the person had not applied for the allotment of the PAN’.

Passed in March 2017, this IT Act amendment comes in the backdrop of several pending petitions challenging the constitutional validity of the Aadhaar project. Since 2013, the Supreme Court has passed multiple interim orders directing that Aadhaar remain purely voluntary till the pendency of these petitions. In August 2015, the Supreme Court had referred these matters to a larger bench, citing ambiguity in the Court’s jurisprudence on the fundamental right to privacy. Almost two years later, this bench remains to be constituted.

This background is pertinent given that the petitioners were forced to limit their submissions to the issue of linking Aadhaar numbers with PAN. The pending reference effectively ended up acting as a bar to assail the IT Act provision on the basis of privacy issues associated with Aadhaar.

The challenge constitutes of two separate writ petitions, filed by different sets of petitioners. The first petition has been filed by Mr. Binoy Viswam and the second by (Retd). Maj. Gen. Vombatkere and Mr. Bezwada Wilson, who are also petitioners in the main challenge to the Aadhaar project.

Arguments Advanced on behalf of Mr. Viswam:

The counsel for Mr. Viswam primarily advanced two arguments – that Section 139AA is unconstitutional as it violates and overrules several orders of the Supreme Court, and that it infringes Article 14 of the Constitution.

  • Section 139AA violates orders of the Supreme Court that were based on the Central Government’s undertakings – It was argued that by way of successive interim orders, such as on 23 September 2013, 11 August 2015, 15 October 2015 and 14 September 2016, the Court had directed that Aadhaar remain purely voluntary. The 15 October 2015 order specifically states that the Aadhaar scheme must remain voluntary ‘till the matter is finally decided by this Court one way or another’. Reference was also made to the Supreme Court’s recent order in Lokniti Foundation v. Union of India (6 February 2017), where it recorded the government’s submission that Aadhaar was voluntary for obtaining a telephone connection.

Based on these facts, it was argued that no one could be deprived of a service or benefit for want of an Aadhaar number. The bench observed that such undertakings could not preclude the Parliament from passing a law (such as that in issue). To this, the counsel responded stating that the state could not indirectly make Aadhaar mandatory under the IT Act while it remained voluntary under the parent Act, that is – the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (‘Aadhaar Act’). Section 7 of the Act, which stipulates that no benefit or service can be denied on the ground of not having an Aadhaar number, was read to support this contention.

Additionally, it was argued that these interim orders granted individuals a right – the right to not enroll for Aadhaar. This could not be taken away till the decided the matter conclusively. The counsel buttressed this contention citing precedent – Madan Mohan Pathak v. Union of India (1978) 2 SCC 50 and Indian Aluminium Co. v. State of Kerala (1996) 7 SCC 637, amongst others.

  • Section 139AA is violative of Article 14 because it unreasonably targets individuals out of all categories of assessees and for bring arbitrary – Besides individuals, entities such as companies, partnership firms, co-operative societies and trusts are also required to file returns on their income. As a result, it was argued that Article 139AA discriminated between assessees as it only adversely impacted individuals.

The argument advanced was that the twin test of permissible classification – that the classification is not based on an intelligible differentia, and that the differentia has no rational relation to the object sought to be achieved by the provision, were not satisfied in the present case. Given that the object of linking the Aadhaar and PAN is to address black money and weed out fakes, the provision fails to address nefarious activities carried through companies or trusts. This argument was later also advanced on the ground of proportionality.

This was met with some resistance by the bench, which observed that there was a natural distinction between natural and juristic persons and a distinction on that ground was not, discriminatory per se. It went on to observe that the law could be treated as a mere replacement of one system by another. The larger challenge to Aadhaar aside, it was difficult to assail the validity of a new or reformed system on this ground alone.

Counsel for Mr. Viswam then attempted to show that the provision is unconstitutional for being arbitrary. He submitted that such an unreasonable classification virtually resulted in ‘civil death’ for an individual. As per Section 114B of the IT Act, a PAN is necessary for eighteen essential transactions including opening a bank account and purchasing shares. If invalidated under Section 139AA(2), it would unreasonably restrict the right of individuals to carry on their business, as opposed to entities such as companies. Further, the individual would also be subject to additional penalties due to the legal fiction by which an individual is assumed never to have applied for a PAN. It was argued that this retrospective effect was highly prejudicial to individual assessees.

This was immediately objected to by the Attorney General, who argued that the legal fiction was not intended to be retrospective and would only apply from 1 July 2017, which is the deadline for linking Aadhaar with PAN.

To conclude, it was submitted that as per the data published by the Unique Identification Authority of India, enrolment rates for several states such were above 100%. This data was used to show that the problem of fakes or bogus cards existed even under the Aadhaar regime.

Post lunch, the counsel for (Retd.) Maj. Gen. Vombatkere and Mr. Wilson began arguments. He outlined his prayers before the Court – that Section 139AA be struck down, or alternatively, be read down to make Aadhaar a voluntary requirement.

As a preliminary point, he argued that neither of the petitioners had enrolled for Aadhaar. Being parties to the petitions challenging the Aadhaar project, they were conscientious objectors to the entire scheme. He proceeded to outline the broader issues in the challenge, with a view to provide the judges with some context. His submission rested on the idea of autonomy and bodily integrity associated with biometrics such as fingerprints and iris scans. Arguing that the Indian Constitution guaranteed a free, democratic society, he stated that the state had no dominion over core elements on one’s body and identity. As a result, the state could not coerce citizens to part with this information as a condition or as a bargain for enjoying rights guaranteed to them.

The arguments on behalf of (Retd.) Maj. Gen. Vombatkere and Mr. Wilson will continue on April 27 and will build on the specific issue of Article 139AA. The Attorney General is also likely to make his submissions on behalf of the Union Government.