June 12, 2017 -
India’s Supreme Court said in a ruling that citizens cannot be forced to enroll for Aadhaar — a 12-digit unique identity number based on collected biometric information — to file tax returns, which could derail Prime Minister Narendra Modi’s plans to transition to a cashless economy, according to a report by Bloomberg.
The Supreme Court partially stayed a law that made the Aadhaar card mandatory for filing returns or for obtaining a 10-digit alphanumeric code the Income Tax Department issues to taxpayers.
The stay will resume until the top court comprised of a minimum of five judges decides on what the privacy rights are under the country’s laws, a two-judge panel ruled, which also recommended that the government to address data security issues.
“These concerns need to be addressed by the government so that confidence is instilled in the public at large,” Justices A.K. Sikri and Ashok Bhushan said in their ruling.
Modi initially opposed the Aadhaar program before being elected as prime minister, stating that it violated national security and the public’s privacy rights.
However, the program has since become an instrumental component of his initiative to move India over to cashless transactions and eliminating fraudulent or duplicate social security benefit payouts.
The government recently revealed that 1.15 billion citizens already have Aadhaar numbers, which represents 95 percent of the country.
In addition, the program currently has 582 banks, brokerages and government departments listed as eligible users that are able to access Aadhaar’s data.
“The court said that since a larger challenge is pending before a constitution bench, the current mandate that it should be mandatory even for those who don’t have Aaadhar should not be enforced,” Attorney General Mukul Rohatgi said.
India amended a law in March that made it compulsory for taxpayers to provide their Aadhaar number in order to file tax returns.
The government says linking Aadhaar numbers with the tax identification numbers will help prevent fake and duplicate accounts, which are used for money laundering and tax-evasion, as well as the creation and channeling of fraudulent money.
Several politicians, lawyers and activists have spoken out against the Aadhaar program in the Supreme Court, questioning the state’s power to force citizens to provide their biometric data. In response, the government said that a citizen’s right is not absolute.
Earlier this year India’s tax department announced that all individuals who opened a bank account between July 2014 to August 2015 had to have submitted know your customer (KYC) details and their Aadhaar number to banks and financial institutions by the end of April.