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'We Are Not Foreigners': Why SC Order Has Sparked an Identity Debate in Sikkim

The court referred to Sikkimese Nepalis as people of 'foreign origin', sparking a row in the state.

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The usually peaceful Himalayan state of Sikkim has been witnessing protests over a Supreme Court judgment, which observed that Sikkimese Nepalis were people of "foreign origin."

Clashes broke out between ruling Sikkim Krantikari Morcha (SKM) and Opposition Sikkim Democratic Front (SDF) cadres at Namchi on the morning of Saturday, 4 February.

Stones were thrown at the SDF's party office after they called for a Sikkim bandh on 4 and 5 February.

The apex court was deciding on a petition relating to tax exemptions for residents of Sikkim when it made the controversial statement. The court also described ethnic Sikkimese communities like the Bhutias and the Lepchas as "original inhabitants of Sikkim."

The court referred to Sikkimese Nepalis as people of 'foreign origin', sparking a row in the state.

A protest rally in Sikkim. 

(Photo: Accessed by The Quint)

On 2 February, the state's Health Minister Mani Kumar Sharma resigned in protest against the government's failure to respond to the court's observation.

The previous day, Additional Advocate General Sudesh Joshi resigned in the face of allegations that he had not briefed the court adequately about the distinction between the Sikkimese Nepali population and other 'old settlers', which had led to the observation.

But who are the 'old settlers'? And why has the order sparked an identity debate in the state? Read on.

'We Are Not Foreigners': Why SC Order Has Sparked an Identity Debate in Sikkim

  1. 1. First, What Are Sikkim's Tax Laws?

    Sikkim was merged into India on the condition that its old laws and special status, as envisaged in Article 371(f) of the Constitution, remained intact. Thus, the state followed its own Sikkim Income Tax Manual 1948, which governed its tax laws.

    Under this, no resident needed to pay taxes to the Centre.  

    However, when Sikkim's tax laws were repealed in 2008, the Union Budget that year exempted the state's residents from paying taxes by inserting Section 10 (26AAA).

    Since an old law was being replaced with the Income Tax Act-1961 of India, a section in the Act protected the special status given to Sikkim and the 'Sikkimese' people. Thus, under 26AAA, the income accrued by Sikkimese individuals in the state, by way of dividends or interest on securities from elsewhere, was exempted.

    What Did the SC Judgment Pertain to?

    The top court's judgment, which has drawn flak, pertained to a case filed by the 'Association of Old Settlers of Sikkim and Others,' mainly comprising trader communities in the state.

    The 'old settlers' comprise multiple ethnic and religious groups, such as the Marwaris, Biharis, Punjabis, Muslims, and so on. They have been fighting to gain equal rights in Sikkim since they are similarly placed as the Sikkim subject holders, i.e., claiming settlement before the merger into India in 1975.

    The 'old settlers' challenged the very tax exemption guaranteed to certain Sikkim residents under Section 10 (26 AAA) of the Income Tax Act, 1961.

    This exemption excluded Indian nationals residing in Sikkim before 1975 (the old settlers) and also excluded Sikkimese women who marry a non-Sikkimese man.

    The court referred to Sikkimese Nepalis as people of 'foreign origin', sparking a row in the state.

    A protest rally in Gangtok.

    (Photo: Facebook/ Arun Upreti)

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  2. 2. What Was the Petitioners' Contention?

    In its judgment delivered on 13 January, the top court said that under the Sikkim Income Tax Manual, 1948, "all persons engaged in business were subjected to tax irrespective of their origin. Therefore, there was no difference made out between the original inhabitants of Sikkim, namely, the Bhutia-Lepchas, and the persons of foreign origin settled in Sikkim like the Nepalis or persons of Indian origin who had settled down in Sikkim generations back."

    The judgment also recorded the petitioners' contention that migrants from other countries or erstwhile kingdoms like "Nepalese migrants," who "migrated to and settled in Sikkim at the same time or even after migrants/settlers of Indian origin," were benefiting from Section 10(26AAA) of the Income Tax Act, 1961, "while arbitrarily excluding settlers of Indian origin such as the petitioners herein."

    What Was the Court's Decision?

    The court held that the benefit of the tax exemption should be extended to all Indian citizens domiciled in Sikkim. It further struck down the exclusion of Sikkimese women who marry a non-Sikkimese man, stating it violated their fundamental rights.

    But Why the Outrage?

    Though the verdict in favour of the 'old settlers' was widely welcomed, the apex court's observation terming Sikkimese Nepalis as people of foreign origin triggered an outrage. To understand why it happened, it is crucial to examine the ethnic composition of the state.

    Expand
  3. 3. 'Cannot Lay Claim to Our Sikkimese Identity'

    The problem, however, runs beyond just the 'foreigner tag', said Amrit Sharma, a member of Youth of Sikkim, a non-political platform for the youth of the state.

    "The issue is not the court calling us foreigners. The issue is much beyond that. What many people have missed is that the judgment has diluted/struck down the definition of who a Sikkimese is (under which certain rights were guaranteed), which was clearly defined earlier."

    "We are Indians, but we are also Sikkimese. We have our own unique identity. The Nepalis in Sikkim have contributed immensely to the state. Generations of Nepalis have worked for the progress of the state. Tomorrow, if the Centre asks us to pay taxes, we will do it willingly. But if the SC themselves brand us as foreigners, we cannot lay claim to our Sikkimese identity. In a way, the court is also implying that only the Bhutias and Lepchas are Sikkimese then."

    'Raises Many Uncomfortable Questions'

    Sharma added that the court was contradicting itself while passing such a judgment.

    "When a referendum was held on whether Sikkim wanted to be a part of India or not, a majority of the population (Sikkimese Nepalis) voted for India. By calling us foreigners, the court actually is raising questions obout the referendum, as 'foreigners' cannot vote in a referendum. The question then arises about who voted in the referendum," he added.

    Expand
  4. 4. 'Could Have Geopolitical Implications'

    Rupen Karki, general secretary, Sikkim Progressive Youth Forum, told The Quint that the court's observation has created fear among a majority of people in Sikkim.

    "It has created insecurity, which helps the government suppress people when they raise serious issues," Karki said, adding that the issue has the potential to create instability in the region, which is not good for a border state like Sikkim.

    "If the issue is not solved, it may have huge implications on national security. After all, China is just across the border. What if it decides to play into the strife?" he added.

    What Is the Govt Doing?

    The state government has filed a review petition in the Supreme Court for the rectification of the court's observation.

    "We want the defintion of who a Sikkimese is to remain intact," Chettri said.

    (At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)

    Expand

First, What Are Sikkim's Tax Laws?

Sikkim was merged into India on the condition that its old laws and special status, as envisaged in Article 371(f) of the Constitution, remained intact. Thus, the state followed its own Sikkim Income Tax Manual 1948, which governed its tax laws.

Under this, no resident needed to pay taxes to the Centre.  

However, when Sikkim's tax laws were repealed in 2008, the Union Budget that year exempted the state's residents from paying taxes by inserting Section 10 (26AAA).

Since an old law was being replaced with the Income Tax Act-1961 of India, a section in the Act protected the special status given to Sikkim and the 'Sikkimese' people. Thus, under 26AAA, the income accrued by Sikkimese individuals in the state, by way of dividends or interest on securities from elsewhere, was exempted.

What Did the SC Judgment Pertain to?

The top court's judgment, which has drawn flak, pertained to a case filed by the 'Association of Old Settlers of Sikkim and Others,' mainly comprising trader communities in the state.

The 'old settlers' comprise multiple ethnic and religious groups, such as the Marwaris, Biharis, Punjabis, Muslims, and so on. They have been fighting to gain equal rights in Sikkim since they are similarly placed as the Sikkim subject holders, i.e., claiming settlement before the merger into India in 1975.

The 'old settlers' challenged the very tax exemption guaranteed to certain Sikkim residents under Section 10 (26 AAA) of the Income Tax Act, 1961.

This exemption excluded Indian nationals residing in Sikkim before 1975 (the old settlers) and also excluded Sikkimese women who marry a non-Sikkimese man.

The court referred to Sikkimese Nepalis as people of 'foreign origin', sparking a row in the state.

A protest rally in Gangtok.

(Photo: Facebook/ Arun Upreti)

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In its judgment delivered on 13 January, the top court said that under the Sikkim Income Tax Manual, 1948, "all persons engaged in business were subjected to tax irrespective of their origin. Therefore, there was no difference made out between the original inhabitants of Sikkim, namely, the Bhutia-Lepchas, and the persons of foreign origin settled in Sikkim like the Nepalis or persons of Indian origin who had settled down in Sikkim generations back."

What Was the Petitioners' Contention?

The judgment also recorded the petitioners' contention that migrants from other countries or erstwhile kingdoms like "Nepalese migrants," who "migrated to and settled in Sikkim at the same time or even after migrants/settlers of Indian origin," were benefiting from Section 10(26AAA) of the Income Tax Act, 1961, "while arbitrarily excluding settlers of Indian origin such as the petitioners herein."

What Was the Court's Decision?

The court held that the benefit of the tax exemption should be extended to all Indian citizens domiciled in Sikkim. It further struck down the exclusion of Sikkimese women who marry a non-Sikkimese man, stating it violated their fundamental rights.

But Why the Outrage?

Though the verdict in favour of the 'old settlers' was widely welcomed, the apex court's observation terming Sikkimese Nepalis as people of foreign origin triggered an outrage. To understand why it happened, it is crucial to examine the ethnic composition of the state.

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In Sikkim, primarily three groups reside – Bhutias, Lepchas, and Sikkimese Nepalis. Among the three, Nepalis constitute the majority of the population. They did constitute a majority of the population even when the state was merged into India in 1975.

By terming Nepalis as foreigners, the court has hurt the sentiments of the community, Keshav Sapkota, general secretary of a Joint Action Committee, an ad-hoc body, told The Quint.

He pointed out that in 1961, when Sikkim was a kingdom and the Chogyal of Sikkim (king of Sikkim) gave the option to the 'old settlers' (people who had set up businesses in the state) to give up their Indian citizenship and became a subject of Sikkim, a majority of them refused to do so.

The court referred to Sikkimese Nepalis as people of 'foreign origin', sparking a row in the state.

Students take out a protest rally in Gangtok with a slogan on a placard that reads, "If we are asked to pay taxes, we will do it, but we will not give up on our identity."

(Photo: Accessed by The Quint)

"But now that they want to refrain from paying taxes, they are suddenly playing the 'we are also Sikkimese card'," he said.

"Today, the apex court is calling us foreigners. What guarantee is there that tomorrow, they may not take away our rights? We willingly agreed to become a part of India but if the apex court cannot guarantee us our rights, then who will?" he added.

He said the Nepali community in the state has not created any problems and they have always been peaceful.

"I always thought I was an Indian of Sikkimese origin. But now, the highest court has called us foreigners. It is an insult to our sacrifices," Rewaj Chettri, an entrepreneur from Sikkim, told The Quint

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'Cannot Lay Claim to Our Sikkimese Identity'

The problem, however, runs beyond just the 'foreigner tag', said Amrit Sharma, a member of Youth of Sikkim, a non-political platform for the youth of the state.

"The issue is not the court calling us foreigners. The issue is much beyond that. What many people have missed is that the judgment has diluted/struck down the definition of who a Sikkimese is (under which certain rights were guaranteed), which was clearly defined earlier."

"We are Indians, but we are also Sikkimese. We have our own unique identity. The Nepalis in Sikkim have contributed immensely to the state. Generations of Nepalis have worked for the progress of the state. Tomorrow, if the Centre asks us to pay taxes, we will do it willingly. But if the SC themselves brand us as foreigners, we cannot lay claim to our Sikkimese identity. In a way, the court is also implying that only the Bhutias and Lepchas are Sikkimese then."

'Raises Many Uncomfortable Questions'

Sharma added that the court was contradicting itself while passing such a judgment.

"When a referendum was held on whether Sikkim wanted to be a part of India or not, a majority of the population (Sikkimese Nepalis) voted for India. By calling us foreigners, the court actually is raising questions obout the referendum, as 'foreigners' cannot vote in a referendum. The question then arises about who voted in the referendum," he added.

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'Could Have Geopolitical Implications'

Rupen Karki, general secretary, Sikkim Progressive Youth Forum, told The Quint that the court's observation has created fear among a majority of people in Sikkim.

"It has created insecurity, which helps the government suppress people when they raise serious issues," Karki said, adding that the issue has the potential to create instability in the region, which is not good for a border state like Sikkim.

"If the issue is not solved, it may have huge implications on national security. After all, China is just across the border. What if it decides to play into the strife?" he added.

What Is the Govt Doing?

The state government has filed a review petition in the Supreme Court for the rectification of the court's observation.

"We want the defintion of who a Sikkimese is to remain intact," Chettri said.

(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)

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Topics:  Supreme Court   Sikkim 

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