Binoy Viswam v. Union of India
Background
Section 139AA, inserted into the Income Tax Act by the Finance Act, 2017, made it mandatory for every person eligible for an Aadhaar number to quote it when applying for a PAN card or filing an income-tax return from 1 July 2017, and provided that a PAN would become invalid from inception if the Aadhaar number was not intimated. Petitioners, including activist Binoy Viswam, challenged this as unconstitutional, arguing it effectively forced citizens to enrol for Aadhaar, a scheme the separate Aadhaar Act described as voluntary, and infringed their rights under Articles 14 and 19(1)(g) of the Constitution.
Decision Breakdown
The Supreme Court upheld Parliament's competence to enact Section 139AA and held it was not discriminatory (Article 14) nor an unreasonable restriction on the right to carry on an occupation (Article 19(1)(g)), and found no conflict between the Aadhaar Act and the Income Tax Act since they operate in distinct fields. However, the Court read down the proviso to Section 139AA(2) to operate only prospectively, not retrospectively, meaning an existing PAN could not be treated as void from its original date of issue merely because Aadhaar was not later linked, since that would unsettle already-accrued rights and transactions. The Court expressly declined to rule on whether the provision violated the right to privacy under Article 21, since that question was already pending before a Constitution Bench (which later decided the landmark Puttaswamy privacy case), and ordered a partial stay on the invalidation proviso pending that outcome.
Lesson Learnt
A law can validly make an otherwise "voluntary" government scheme like Aadhaar a mandatory precondition for an unrelated benefit (here, a PAN card) without violating equality or trade/profession rights, but courts will still guard against such laws being applied retroactively to undo rights or transactions that already became final before the new requirement existed.