Governance

Who is an actual “Sikkimese”?

The Supreme Court judgement of January 13 this year continues to cause ripples across Sikkim. Here is what it is all about

 
By Deepak Tewari
Published: Thursday 11 May 2023
Who is an actual “Sikkimese”?
The 12th Chogyal (King) of Sikkim and his Gyalmo (Queen consort), Hope Cooke, with their daughter, Hope Leezum, watch birthday celebrations in Gangtok, Kingdom of Sikkim. Photo: Alice S Kandell via Wikimedia Commons The 12th Chogyal (King) of Sikkim and his Gyalmo (Queen consort), Hope Cooke, with their daughter, Hope Leezum, watch birthday celebrations in Gangtok, Kingdom of Sikkim. Photo: Alice S Kandell via Wikimedia Commons

Sikkim woke up to a news on January 13, 2023. News that the “Old settlers” or non–Sikkimese persons, also referred to as the left out category, had been allowed exemption from payment of income tax like the Sikkimese people who enjoy tax exemption under Section 10 (26AAA) of the Income Tax Act, 1961.

The exemption was awarded by the Supreme Court of India as court judgment to the petition filed by the Association of Old Settlers of Sikkim (AOSS), a body formed by the “old settlers” to pursue income tax exemption.

Sikkim, a Himalayan kingdom ruled by the Chogyals, merged with the Indian Union as its 22nd state in the year 1975. The merger gave birth to various provisions, rules and laws that would continue to be applicable to Sikkim and the Sikkimese after being a part of India.

Article 371 (F) of the Constitution of India is one example of the special provisions exclusive to Sikkim and the erstwhile Sikkim subjects — or the citizens of the Himalayan nation of Sikkim and their descendants.

Indian Income tax was not extended to Sikkim on its merger with India. The state continued to be governed by its own IT manual until 2008 when the Government of India extended the Income Tax Act, 1961, to Sikkim.

The extension, followed by representations and lobbying by the state, did uphold the spirit of merger. Section 10 (26AAA) of the Act exempted indigenous Sikkimese from payment of income tax out of income originating in the state of Sikkim.

Indigenous Sikkimese (mostly from the Nepali, Lepcha and Bhutia communities) had once been subjects of the Sikkim monarch and had their names recorded in the Sikkim Subject Register, a database of the subjects of Sikkim maintained by the erstwhile kingdom.

This 2008 extension of income tax and the enactment of Sec 10 (26AAA) meant that persons residing in Sikkim, who did not have their names recorded in the Sikkim Subject Register maintained by the kingdom, had to start filing tax returns and pay income tax like any other Indian Citizen.

This came as a bolt from the blue to the non-indigenous residents of the state, predominantly the business community (mostly from other parts of India) who had been enjoying non-payment of Indian income tax like anyone else in the state.

Considering the high income levels of this section compared to the indigenous Sikkimese who are mostly farmers or state employees, the tax liability of the non-Sikkim subjects would have been sizeable.

The left-out or the non-Sikkimese then formed the AOSS, a body that would pursue exemption from payment of Income Tax for them.

The AOSS, from 2009, started to communicate with the Centre for exemption. In 2013, they filed a writ petition regarding the matter in the Supreme Court of India. The developments were well-known to Sikkimese society and people from all communities had been openly supporting the demand of the AOSS.

Sikkim and its people are peace-loving, friendly, warm and believe in the spirit of brotherhood and unity. The business community, though from a different cultural background, have always been welcomed as a part of the larger Sikkim family.

There have been no communal divisions, no bullying, no sideling of anyone in Sikkim on cultural, communal or religious lines ever. The whole state continued to extend its best wishes to the AOSS in its fight for tax exemption.

Initially, the January 13, 2023 Supreme Court judgment was received with joy and relief. Social media was flooded with congratulatory messages to AOSS for their victory. It was when the judgment was read in detail that emotions turned sour.

The state was shocked to learn that AOSS had obtained the exemption for themselves with arguments that indigenous Sikkimese were immigrants of a foreign nation and if immigrants could enjoy tax exemption then they, “real Indians” should be exempted too.

The AOSS also employed grounds of Right to Equality and had blatantly argued to infringe upon the rights and privileges exclusive to the Sikkim subjects.

The (indigenous) Sikkimese population felt they had been backstabbed. Civil society in Sikkim came together under the banner of Joint Action Council (JAC).

The judgment, the writ, the arguments were perused and the contents that came out, gave one shock after another.

The people of Sikkim feel that while successive state governments since 2013 were always a party to this particular case and had access to all the submissions and arguments employed by the AOSS, why did they not nip the bud?

Why were the Sikkimese people kept in the dark for all the 10 years while AOSS attacked Sikkim subjects with choicest of adjectives like foreigners, immigrants, etc?

Also while the Government of India, another party to the case, had objected to any changes to the tax structure of Sikkim, why did the state government continue to support the writ and be blind to the moves of AOSS who clearly were moving in to secure tax exemption by diluting the provisions of old laws that is the essence of the social structure of Sikkim?

To make matters worse, post-2019, the state appointed an Additional Advocate General who happened to be a member of the “old settler” community, someone who has today benefitted with the verdict.

Sikkim today feels that the AOSS were allowed to make, fight and win the case as they desired, with the people mandated to protect the interest of the majority Sikkimese choosing to remain blindfolded and their mouths taped.

The stand of the state also lacks any economic sense. The newly exempted category may account to roughly 3-5 per cent of the population but control over 80 per cent of the state economy through businesses like manufacturing and services, contracts, government supplies, etc.

The arrangement is such that the category is a major holder of financial resources in Sikkim and thus the largest political funding may come from them. How does the state intend to benefit by exempting 80 per cent of its businesses from payment of income tax is another question awaiting a detailed answer.

Some members of the AOSS had also, in the past, been involved in a fake gift scam, a form of money laundering that brought a lot of disrepute to Sikkim.

The people of Sikkim are worried.

Some face-saving attempts by approaching the Supreme Court for deletion of terms like “foreigners” from the judgment were made but serious damage happened with the amendment to Section 10 (26AAA) very recently, where a new category of Sikkimese was created for the purpose of extending income tax exemption.

How can someone become Sikkimese today without having been the citizens of the Kingdom of Sikkim? Why did the Advocate General of Sikkim, his deputy and his team resign as soon as the verdict came out?

Why were the resignations hastened well before the expiry of their terms? Why the members of Parliament representing Sikkim chose to not utter a word in the house when the Finance bill was placed?

What is the assurance that the same arguments will not be used or new cases not be filed to allow old settlers to buy land and settle across Sikkim, take over whatever little is left of the original Sikkimese? Why are there attempts to falsely potray that nothing has happened and all privileges of Sikkimese are secure?

These are questions that are flowing in the Sikkim winds at present.

The writer is a rural banker, a dairy farmer and a social commentator from Sikkim. He can be reached at tewarideepak@yahoo.co.in

Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth

Subscribe to Daily Newsletter :

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.