SC grants 8weeks for completion of Old Settlers of Sikkim verification

Gangtok, 24 Jul:

The Supreme Court today granted 8 weeks’ time to the State Governmentto complete the verification of Old Settlers of Sikkim, the namesand number of such persons who claim the Income Tax exemption benefitat par with Sikkim Subject holders and their descendants.

The State Government had sought time of six weeks from the top court tocomplete the verification as the process is under process.

While granting the time as sought by the State Government today, thedivision bench of Apex Court headed by Justice RohintonFaliNarimanand InduMalhotra also directed the registry to list the matter aftereight weeks on 19 Sept for further hearing.

The 400 odd families under the banner of Association of Old Settlers of Sikkimhad filed a writ petitionseeking Income Tax exemption at par withSikkimese people who are exempted under the provision of section 10 [26AAA] introduced in the Income Tax Act 1961 in the year 2008.

In 04 Apr, while hearing the petition, the Apex court had directed theState of Sikkim to verify and cooperate with the Central Government sothat the claim of the Association of Old Settlers of Sikkim can beconsidered by the Central Government in accordance with law.

The Apex Court has made it clear that all the contentions of theparties are left open to be considered on the next date of hearingadding that the State respondent may furnish such other information as maybe sought by the Central Government while considering the claim of thepetitioners in accordance with law.

The Association of Old Settlers of Sikkim have challenged the Clause26 AAA of Section 10 of the Income Tax Act, 1961, saying that theclause was discriminatory and violated Articles 14 and 15 as 95% of the State’s population that was exempted from paying tax“includes about 70% people of Nepalese origin, and the entireexemption has come about to appease the electorate.” The remaining 05% of the population including the old shelters was to pay thetaxes.

The Centre had exempted Sikkim Subject Certificate holders, about 95% of Sikkim’s population, from paying income tax in 2008 afteran amendment in the Finance Act by the Parliament based on the State’srequest.