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Courting trouble PDF Print E-mail
Wednesday, 06 July 2011 00:00
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While ruling that a former Supreme Court judge head a Special Investigative Team (SIT) on unearthing black money, the Court makes pretty compelling arguments. Many of them, in fact, seem like a repeat of the 2G story, that despite knowing what was happening, the government did precious little about it, and whatever progress was being seen today was really the result of the Court’s prodding. In the Raja case, until the Court intervened, the investigative authorities had not even seen it fit to question the minister. In this case, the Court gives details of how the government knew about Hassan Ali Khan for several years and even served an income tax notice for R40,000 crore on him (R20,580 crore on his associate) but very little had been done after this—indeed, the Court points out, even custodial interrogation had not been asked for until the Court got into the act. The Court gives several other examples of the government’s sloth when it comes to unearthing black money and even rules that the arguments given by the government for not disclosing the names of Indians who had accounts in the Liechtenstein bank—that this was barred by the Indo-German treaty on double taxation—were specious. The Court rules the treaty doesn’t proscribe disclosure—it goes on to add that the treaty doesn’t even apply since Liechtenstein is an independent and sovereign nation-state!—though it says the right to privacy means the names of those not proved guilty cannot be disclosed. The fact that there are still such huge tax arrears—R1,17,000 crore is the latest figure—also suggests similar reluctance to act. In the celebrated VDIS tax amnesty, tax evaders were allowed to get away with tax payments of 5-10% against the prescribed 35% and no action was taken against officials who allowed this … the list goes on.

It is after this, however, that things get a bit worrying. The SIT, which is to be headed by retired Justice BP Jeevan Reddy, is to be in charge of all investigations and prosecution in not just the Hassan Ali case but for all ongoing/pending investigations in black money cases as well as for any that come up in the course of investigations. That is a huge remit and means the courts will have to get involved in virtually the day-to-day running of affairs (should the Mauritius treaty be abrogated, does the Indo-German DTAA need to be re-worked … the list is endless). The Court is right when it says the government’s performance has been lacklustre in too many cases. The question is whether getting the Court into the day-to-day affairs of government is a healthy precedent?

 

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