The Centre on Wednesday submitted to the Supreme Court the names of 26 Indians with “black accounts” in Germany’s Liechtenstein Bank in a “sealed cover”, with a rider that these cannot be made public, but the court disapproved of such a stand and repeatedly asked the government why it was so “sensitive” about disclosure of the names.
A bench of Justices B. Sudershan Reddy and S.S. Nijjar termed the black accounts of Indians in tax havens as nothing less than “plundering” of the nation’s wealth. The judges were unimpressed with solicitor-general Gopal Subramaniam’s argument that secrecy has to be kept under the double taxation avoidance agreement with Germany, which provided the data about the 26 accounts in Liechtenstein Bank.
“All that we want to know from you is that you have only this information (about the accounts). The situation is that huge money is involved. It is almost plunder of the nation’s money,” the judges said during the unfinished hearing on a petition by former law minister Ram Jethmalani that lasted three hours.
“It is simple theft of the nation’s money. We are talking about a mind-boggling crime, we are not talking about the niceties of going around the treaties,” the bench said, pointing out that the figure of $1.4 trillion (estimated as the amount of black money illegally stashed by Indians in foreign bank accounts) was “mind-boggling”.
The solicitor-general said while the $1.4 trillion figure was certainly “mind-boggling”, there was also the question of “tax” involved.
When the bench sought a clarification on how the “tax” issue came into the picture, Mr Subramaniam said: “Tax evasion is given paramount importance all over the world in such matters. Fishing and roving inquires are not permissible (by the governments of countries where the accounts are held). Details are made available only on specific information.”
Referring to the Liechtenstein Bank accounts, Mr Subramaniam said the government was bound by its bilateral arrangements with Germany. “We need to respect the confidentiality clause. We need information about other people and unless we respect their laws, initiating negotiations with other countries will be impeded.”
The court also raised a question about the filing of an affidavit in such an important matter by a director-level officer in the finance ministry, saying it expected the finance secretary himself to file it. But the government law officer said under the rules and procedure, authority was delegated to a particular officer to file an affidavit.
Not satisfied, the court said: “Authorisation is one thing. We thought the person should be the finance secretary considering the seriousness of the issue.”
The solicitor-general, however, insisted that even if the affidavit was filed by a director-rank officer, “it goes to the highest authority for authorisation. Still, if any additional information is required, we will file an additional affidavit.”
Questioning the government’s decision to invoke the double taxation agreement in the case when Germany was ready to share information about secret accounts with several countries, senior advocate Anil Diwan, arguing the petition, said the stashing of ill-gotten money abroad by Indians was not just a matter of tax evasion but had a larger dimension and was a more serious crime. The offences involved “money laundering, cheating and fraud”, for which offenders could be prosecuted under various provisions of the criminal laws, he said. The court adjourned the hearing till January 27.