The Aadhaar Act could not have been passed as Money Bill as it amounts to a fraud on the Constitution and is liable to be struck down, Supreme Court Justice D Y Chandrachud said Wednesday.
According to Section 139AA of Income Tax Act, every person who is eligible to obtain an Aadhaar number shall quote Aadhaar number in the application form for allotment of the permanent account number (PAN) and in the return of income.
In its verdict, the bench noted the submission of Attorney General K K Venugopal that the court should not cross the "lakshman rekha" vis-a-vis the separation of powers.
A majority of the panel ruled the programme had merits, but struck down a government effort to make its use mandatory in applications for services ranging from bank accounts to mobile telephone connections and school admissions. Aadhaar means unique and it is better to be unique than being best, it said.
The Supreme Court on Wednesday said the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, was constitutionally valid, but a person's rights could not be denied on the ground of lack of the unique ID.
While the Aadhaar verdict has been viewed as being in favour of the central government and the Unique Identification Authority of India (UIDAI), it also provides some relief to the petitioners.
Citing the judgment which now allows individuals to lodge complaints under the Aadhaar Act, Singhvi said the Supreme Court is "ripping off the Aadhaar Act".
"The reason why we challenged (it) was because it went beyond the public distribution system, beyond protecting the marginalized, and tried to create a surveillance state", Sibal added. It is also no longer compulsory to give Aadhaar number for school admissions.
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The top court barred private companies from accessing the data and also directed that schools, banks and telecom companies cannot make Aadhaar mandatory for availing their services.
Bypassing the Rajya Sabha to pass the Aadhaar Act amounted to subterfuge and the law was liable to be struck down as being violative of Article 110 of the Constitution, he ruled.
More than a billion Indians have already been enrolled.
But subsequently it began to be used by banks, telecom firms, credit checking firms, and other private companies to validate identities of customers.
"Linking of Aadhaar to mobile phones not constitutional". The Aadhar authentication data can not be stored for more than six months, it added.
The majority order strikes down the requirement to link Aadhaar to a number of services for which it was, at some point, mandatory.
The Supreme Court is delivering verdicts in several key cases today.