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Supreme Court orders partial stay on Aadhaar PAN linkage


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The Supreme Court of India today ruled that the Indian government cannot cancel PAN cards if citizens don’t link an Aadhaar number to their PAN card. The PAN card is a necessary document for filing taxes. In what is a partial stay, the Court said that those who do not have an Aadhaar card should not be forced to get one. However, those who have a PAN card, will need to connect it to Aadhaar. They have this written down Section 139AA of the income tax act, but held it constitutional while also saying that the “Parliament needs to consider toning down the provision.” What is unclear is what the Government of India will do if you have an Aadhaar number, but choose not to link it to the PAN card. The full text of the (apparently voluminous) judgment hasn’t been published yet.

The court also highlighted the issue of leakages of personal data and Aadhaar numbers online, creating security concerns for citizens, and said that “this is a concern that needs to be addressed by the government”, adding that severe penalties need to be applicable in case of data leakages, calling preventive measures “essential”.

Issues relating to the right to self determination, the right to be left alone and “informational self determination” were deemed to be related the issue of privacy, which will be heard if and when the Supreme Court sets up a constitutional bench to hear those cases. The court looked at issues related to Article 14 (equality before law) and Article 19 (1) (g) of the Indian constitution, and dismissed the challenges on both grounds. They also said that the Court cannot question the wisdom of the legislature, in the context of the challenge that the Government of India amended the Income Tax Act in a manner that violates the interim injunction that made Aadhaar not mandatory for government schemes, except a few chosen schemes, until the constitutional bench decided on issues related to privacy.

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The court also said that it is the prerogative of the legislature to make laws to ensure that there is deduplication of the PAN base.

This was one of the 6 possible outcomes

The judgment in this case had been reserved on May 4th 2017. As lawyer Gautam Bhatia had pointed out then, there were six possible outcomes in this case:

  1. The Supreme Court strikes down Section 139AA of the Income Tax Act as unconstitutional. Or,
  2. The Supreme Court reads the “shall” in Section 139AA of the Income Tax Act as “may”, and holds that Aadhaar is voluntary for paying tax, (and thus not mandatory). Or,
  3. The Supreme Court “harmoniously interprets” Aadhaar Act and 139AA. That if you already have an Aadhaar, you can be required to quote the number while filing Income Tax returns. However, you can’t be compelled to get an Aadhaar for tax if you don’t have it. Or,
  4. The Supreme Court says it cannot segregate the privacy arguments from the challenge to the Act. It “tags” this case with the main Aadhaar challenge, and “stays” the operation of 139AA pending that judgment. In other words, Aadhaar is not mandatory for tax till Supreme Court says otherwise. Or,
  5. The Supreme Court refers the case to the larger bench, clubbing it with the main Aadhaar challenge, but refuses to stay the operation of Section 139AA (mandatorily linking Aadhaar to PAN). In that case, Aadhaar does become compulsory for tax filing till Supreme Court says otherwise. Or,
  6. The Supreme Court upholds 139AA, and it becomes mandatory to link Aadhaar to PAN numbers for tax filings.

Some of the arguments in this case

The petitioners had argued that:

  • The government had given assurances to the Supreme Court that Aadhaar is voluntary, but continued making it mandatory, and passing the Aadhaar Act in Parliament cannot be used to overrule a court order.
  • Section 139AA of the Income Tax act attacks only individual assessees, even though it is applicable to all. 12 categories are required to file taxes, but only individuals are compelled to get an Aadhaar. The applicability of Aadhaar is arbitrary.
  • Routine activities like buying a car, selling property, opening a savings account would become contingent on parting with biometrics. “How can someone ask for fingerprints for carrying out routine activities?”
  • That Aadhaar forces people to part with their biometrics, and Aadhaar forced people to consent to UIDAI to arbitrarily share their data with third parties. “My fingerprints and iris are mine and my own. As far as I am concerned, the State cannot take away my body. This imperils my life”…”You can’t take my body part as a condition of me exercising my rights. That is a Faustian bargain.” The State lacks the legislative competence to nationalise a person’s own fingerprints. “If the State can have control over your body to this extent, taking your data and centralising it, that reduces us to vassals.”
  • Even if you want to pay taxes, if you do not want to get Aadhaar, there will be penal consequences. The Act violates Article 14 of the constitution.
  • Aadhaar has issues regarding duplicates, fake Aadhaar cards, government departments are leaking data online. Fingerprints can be duplicated from high definition photographs, as can iris data. Despite this, citizens are being coerced to take Aadhaar.
  • Citizens have been denied rations, children are being forced to enroll for Aadhaar.“Are we a State that says that unless you give me your fingerprints, I will not give you ration? Is the individual so subordinate to the State?”
  • Consent must be free and informed, which the Aadhaar act contemplates, and every process suggests that it is voluntary, but the government makes it mandatory. “Compelled free consent is a contradiction in terms.” Aadhaar is changing the relationship between the state and the individual.
  • The level of intrusion is greater in Aadhaar than in PAN or passports, where the interest is limited. In case of Aadhaar, linked to everything, it tracks you 24/7, for everything that you do.
  • An individual must be allowed to limit what he or she puts out to the world. It is her autonomy.
  • An individual must be allowed to limit what he or she puts out to the world. Informational self-determination is essential for the free development of the individual. Likewise, the free development of the individual is essential for a free and democratic society. Informational self-determination is therefore different from the right to privacy. Informational self determination is required for a free and democratic communicative order.
  • Once you submit your fingerprints and iris scan to the UIDAI, under the Aadhaar Act, you yourself can never access your own information (proviso to s.28 and s.29). Thus, there is no question of self-determination here because when one gives up your biometrics to the UIDAI, one truly gives them up. The Union has no competence to nationalise my fingerprints.
  • Coerced demographic information amounts to compelled speech and violates Article 19(1)(a). “I am compelled to “speak” to someone I do not want to speak to. Surely they cannot compel me to speak by making me part with my most sensitive information to private parties.”

The government argued that:

  • The assurances regarding Aadhaar being voluntary were before the Aadhaar Act was passed.
  • Giving fingerprints to the Aadhaar database was acceptable as we in any case give our fingerprints for buying property, visas, give our photos for rations and make driving licenses.
  • Only two ways to challenge an enactment of Parliament – first whether parliament has the power to make such a law and second whether the law infringes the Constitution. A validating law can remove the basis of a judgment.
  • “The right to your body is restricted by the State. This is Rousseau’s Social Contract.” He cited the Termination of Pregnancy Act, pointing out that Abortion is regulated. There are breath checks for drunk driving.
  • The PAN card was suspect because of fraud, tax evasion and black money used for drugs and terror. Aadhaar could not be faked and it was the most secure ID.
  • In the world, the only way is to digitize iris and fingerprint kept for posterity. There is no other way. There is no duplication in the world of fingerprints and iris. If in the future, people find a way to duplicate, we will have to find another way, but today it’s the only way.
  • “The State is like a corporation. Individuals are members of corporation. Nothing absolute in them. We don’t live in vacuum. We are part of the overall collective. This is important philosophically. I expect the State to give me bridges, roads, security. But I don’t want to pay my tax by the rules? Everyone must have an identity.” “In the social contract, I cannot be invisible. the right to be forgotten doesn’t mean a person can be without identity, card, number. You want to be forgotten. But the State doesn’t want to forget you. Individualistic arguments cannot be made. The whole concept is wrong. It is baseless.”
  • PAN-Aadhaar linking was being made mandatory to fulfill international obligations under FACTA which obliged the government to share information on foreign citizens in India with their own governments.
  • The UIDAI precludes itself from aggregating info. It is blind to what Aadhaar is used for. The idea is not to share or track information. If you use Aadhaar for SIM and bank, the Telco will not know the latter.
  • Forcible taking of fingerprints is not self incrimination. This Court said it fifty years ago. We will also go to DNA next. Selvi is different. Narco analysis is invasive. Not fingerprints. We have moved far ahead. We can forcibly take blood, DNA, etc.
  • Aadhaar Act can be used for purposes other than what is contemplated under the Act. See section 57. There is anyway no ban on Parliament to expand Aadhaar uses.

Note: This post has been updated with more inputs from the reading of parts of the judgment in the Supreme Court.

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  • AM

    “However, those who have a PLAN card, will need to connect it to Aadhaar.”

    What does this mean ?

    • Imbid Limbid

      It needs to be: “Those who have a Aadhaar card need to link it to their PAN card.”