Thread by @gautambhatia88

Aadhaar Day 26, Afternoon session. AG has just finished. Tushar Mehta to start arguing for the UIDAI.

Tushar Mehta outlines his submissions.

He begins by saying that the issue of PAN/Aadhaar linkage has already been considered exhaustively by the Court in Binoy Viswan.

Tushar Mehta says that in the privacy judgment, the Court has held that privacy can be subject to +

+ reasonable restrictions.

Tushar Mehta says that for legislation to be invalid it must either fail the test of proportionality or the test of manifest arbitrariness.

TM: Even in Binoy Viswam's case, all these tests have been examined, although in the context of Article 19.

TM says that another ground for valid restriction is that of "larger public interest."

CJI says that there is not much difference between legitimate state interest and larger public interest.

Tushar Mehta says that the larger public interest in linking is preventing income tax fraud, black money, and terrorism.

TM: Since 1989, PAN numbers are mandatory. All demographic information that is now required under Aadhaar was required under PAN including left hand thumb impression.

Bench points out that that's for people who can't sign.

TM says that the point is that people were giving thumb impression.

Sikri J says that in any case, this thumb impression is only on the form, and that is the difference.

TM says that now they are digitally stored.

Chandrachud J: And there's no authentication.

TM: I'm only saying that with respect to privacy, this regime has been in place since 1989.

TM: Requirement of Aadhaar is to ensure deduplication through a robust technological regime. There is empirical data to show the larger public interest.

TM: Coverage of Aadhaar is more than 99%. Aadhaar being unique, deduplication is more systematic.

TM: Multiple PAN cards cause black money, money laundering and shell companies.

In 2006, a large number of PANs were found to be duplicate. This problem still exists. 11.35 lakh cases of fraudulent PANs have been detected.

TM: Income Tax Act applies only to taxpayers. Aadhaar can be used to ensure one PAN to one individual.

TM quotes the Shah Committee SIT on black money which recommended interconnection of databases and a central KYC registry.

TM says that Aadhaar can achieve this through a federated architecture without aggregating information.

TM repeats the point about she'll companies.

*shell, not she'll

TM: Existing IDs on the basis of which PAN is issued can be forged. The use of biometrics will not allow this.

TM: Fake PAN cards have facilitated the growth of large shell companies who have fake shareholders who open numerous bank accounts with fake ID cards.

TM says he has data to show how linking has helped solve the problem.

TM says that demographic details are not enough. There are multiple PANs allotted to one person, and one person has several PANs. Verification of original documents is only 0.02%. For Aadhaar the verification is 100%. It is a robust way of deduplication.

TM: Duplicate Aadhaars are almost non-existent.

TM discusses various frauds involving PANs. Starts with a case in Gujarat.

This case involved the creation of bogus DEMAT accounts through use of other people's photograph. TM says that 3000 bogus accounts were created.

TM: With Aadhaar, enforcement agencies can Red flag and prevent such transactions in the future.

TM discusses more cases of frauds involving multiple PANs and shell companies.

TM says that in 2009, there were plans for a biometric PAN, but then Aadhaar came in, so those plans were dropped.

TM talks about widening the tax base.

(Sorry, he speaks very fast.)

TM is quoting statistics on the difference between PAN cards and tax base.

Sikri says that this difference may not simply be because of duplicates. Nowadays for a lot of transactions you need a PAN.

TM is reading out from a CAG report.

Sikri J says that is the only basis for this assessment orders - because they are often set aside. The figures do not reveal how much of this difference is caused by duplicate PANs.

TM says that he will check.

Chandrachud J says that the same ingenuity for PAN scams can +

+ happen with Aadhaar.

TM says that no system can be foolproof. They are trying to make it better.

Chandrachud J says that we are always trying to stay one step ahead of the lawbreakers.

TM says that if we have a better technology, we must implement it.

TM says that technology is being upgraded on a daily basis.

TM says that the tax to GDP ratio is very low.

TM reads out various figures to show this.

TM says that we are a tax non-compliant society and the predominance of cash makes this possible.

TM says that those who evade taxes create a burden on those who pay honestly. He say that "on a lighter note", this also applies to people claiming their "privacy."

TM talks about India's obligations under international legal instruments such as the FATCA and the CRS.

TM says that fake PANs will create a major embarrassment for the country with respect to international obligations.

TM says that these are all the justifications for linking PAN with Aadhaar.

TM is talking about the benefits of linking Aadhaar with PAN in terms of efficiency and security. Quotes figures on how many people have linked.

TM says that in Binoy Viswam’s case, the Court has dealt with all these issues. Even though the court did not deal with privacy in that case, the court applied all the tests that are used to test privacy violations.

TM says that effectively the privacy judgment retrospectively ratifies the Binoy Viswam judgment. This bench is not sitting in appeal over that judgment. Therefore, the observations in that case cannot be reopened.

(NB: Binoy Viswam was decided by Sikri and Bhushan JJ who are also on this bench. This is the Aadhaar PAN judgment from last July.)

Bench rises. To continue tomorrow.

Cheers.