"542 persons are sitting in Parliament, why do they not object to it? If they are not objecting on it, why should we go into it," a bench comprising Justices A K Sikri and Ashok Bhushan said.
When it was told that the Centre has earlier made a statement in the apex court that they would not make Aadhaar mandatory, the bench said, "they cannot be bound by it. It cannot preclude Parliament from enacting a statutory provision."
The apex court was hearing three petitions challenging the constitutional validity of section 139AA of the Income Tax (IT) Act.
Section 139AA, introduced through the latest budget and the Finance Act 2017, provides for mandatory quoting of Aadhaar or enrolment ID of Aadhaar application form for filing of income tax returns and making application for allotment of PAN number with effect from July 1 this year.
During the hearing, the bench also observed that tax evasion existed in India and it was a "shame" that citizens do not want to pay taxes.
The top court said there was no doubt that Aadhaar should be voluntary and observed that since tax evasion existed, the government could bring in new statute to stop such "leakage".
"We know that tax evasion is there. When tax evasion is there, the government is trying to block these leakages by bringing new statute. We citizens are like that. It is a shame that we do not want to pay tax," the bench said.
Defending the Centre's stand to make Aadhaar mandatory for filing of Income tax returns and to apply for PAN, Attorney General Mukul Rohatgi referred to around 10 lakh fake permanent account number (PAN) cards in the country and said Aadhaar was the only system which could prevent duplication or fake cards.
"We have reached to 99 per cent of India's population. We are not at a nascent stage," he told the bench and questioned the maintainability of these writ petitions saying they have not raised the issue of violation of privacy.
Senior advocate Arvind Datar, appearing for a petitioner, told the bench that section 139AA was not part of the original Finance Bill and was introduced at the last moment.
He referred to the Aadhaar Act and said there was not a single word saying that the intention behind the statute was to check the black money and weed out fake PAN cards.
To this, the bench said, "the purpose of the Aadhaar Act is different from that of section 139AA of the IT Act. Therefore, validity of section 139AA cannot be seen at the touchstone of what is there in the Aadhaar Act."
"It (Aadhaar) is voluntary, there is no doubt about it," the apex court said, adding, "Today, we are dealing with a statutory provision which is enacted by Parliament".
The bench, which would continue hearing the arguments on Thursday, also said the purpose of Aadhaar was to extend the benefits of government welfare schemes to the poorer sections so that the money was not misused.
During the hearing, the apex court, on a lighter vein, observed that when a man is getting married, he has the best income and once a maintenance petition is filed, he becomes a pauper.
However, Datar said when Aadhaar has not been made mandatory in the Aadhaar Act, the government cannot make it complusory in the IT Act and the Centre had earlier given an undertaking before the court that except for social welfare schemes, they would not make it mandatory.
"The Supreme Court had directed them that they cannot make it mandatory. The mandate of the Supreme Court can not be undone. My right of not to have a Aadhaar can not be taken away indirectly," he said.
He also argued that the "dangerous" thing was that as per proviso of section 139AA of the IT Act, if someone does not quote his Aadhaar number while filing IT return, his PAN card will be deemed invalid.
When the bench asked whether section 139AA would also apply to non-natural persons like a company, Datar said. "No. It is applicable to individuals only."
He said that section 139AA discriminated between firms and individuals and forces a person to quote his Aadhaar for PAN and it was "virtually like a civil death".
When the petitioners said they were not raising the issue of privacy in the matter, the bench asked, "the entire thinking change the moment you exclude the privacy part."
"We are going into the validity of a Parliamentary legislation. Parliament, in its wisdom, has decided that Aadhaar should be made mandatory for PAN....It is not for this court to say that PAN was not working, so this is good. That is not permissible. We cannot question the wisdom of Parliament like this," the bench observed.
However, the Attorney General countered the petitioner's submission and said, "10 lakh PAN cards have been found to be fake. Are they propagating a general public interest or propagating the fraud (fake PANs) which is going in".
Rohatgi also clarified that nowhere in section 139AA of IT Act, was it mentioned that it would be effective with retrospective effect.
However, Datar said that in Delhi, for 100 persons, 132 Aadhaar cards have been issued and 34,000 private enrollment agencies have been blacklisted.
To this, the Attorney General said in Delhi, there were migrants and the government cannot destroy the Aadhaar cards of people after their death.
Senior advocate Shyam Divan, appearing for two other petitioners, also questioned the government's move and said no one can be compelled to have a Aadhaar card just because section 139AA says so.
He also said the biometric system in Aadhaar was not fool proof and there were instances where data has been leaked.
"These are issues of public interest. It is like an electronic leash and people do not want to live with it. People cannot be compelled to part away with their vital details to private enrollment agencies," he said.
The Centre had earlier faced searching questions from the apex court for making Aadhaar mandatory for PAN cards, despite its order that it should be optional.
The government had earlier said that fake PAN cards were being used to "divert funds" to shell firms.