The Supreme Court on Thursday asked the government what it was doing about Indians with large amounts of black money in Swiss banks and other tax havens as it sought to broaden the ambit of its probing queries and demanded an “action taken” report on all “faceless” Indians who had moved their ill-gotten money overseas.
A bench of Justices B. Sudershan Reddy and S.S. Nijjar, which was so far focused on the names of 26 Indians with “black accounts” in Liechten-stein’s LGT Bank, said: “We would like to further know about faceless persons who stashed huge amounts in banks abroad. What action would you take to know who these persons are? This is the long and short question — we want a reply.”
“Tell us by Monday. This is very simple matter. The information is with you,” said the bench, which was not impressed with repeated references by solicitor-general Gopal Subramaniam to double taxation avoidance agreements and the laws of “tax haven” countries.
While referring to the 26 names with Liechtenstein accounts which the government had got from Germany and placed in a “sealed cover” before the court, the bench said it wanted information beyond this — given that several rich Indians had stashed money abroad in violation of various laws. “They are amenable to the laws of this country,” the court said, reminding the law officer that the petition had been pending two years.
“We have a list containing some names, there are some figures (of black money) known to you. What are the inquiries made about these individuals and the nature of the contents you know,” the bench pointedly asked the solicitor-general.
Apparently not expecting such probing questions, Mr Subramaniam, who detailed some technicalities, sought time to take instructions from the government. “Give me at least two days to pursue the matter. I will file an affidavit and give the required information,” he said.
Senior counsel Anil Diwan, appearing for Mr Ram Jethmalani and certain other prominent citizens, referring to steps taken by the United States, France, Italy, Germany and other countries to get information from the Swiss authorities, said the affidavit should be by some “responsible officer”. He had objected to the filing of an earlier affidavit by a director-level officer in the finance ministry on such an important issue.
During the previous hearing, Mr Diwan had said he expected an affidavit from the finance secretary himself given the importance of the matter.
Mr Diwan also questioned the government for using the double taxation agreement and tax evasion issues repeatedly as a “shield”, saying it should explain if it had registered even a single FIR or even a complaint on the question of black money.
“They have to (say) if the source of money is terrorism, drug-trafficking, arms deals, smuggling (or) money-laundering. If so, why has not even a single case been registered despite the government having information with it about some of the account holders,” Mr Diwan said, adding: “The government is answerable as the petition is pending before the court for two years.”
Mr Jethmalani, at the fag end of Thursday’s hearing, noted that the government had not even “ratified” a UN convention on international cooperation against corruption.
The bench issued notices to the government, the Reserve Bank of India, the CVC, Securities Exchange Board of India, Enforcement Directorate and Central Board of Direct Taxes on a fresh application by former Maharashtra DGP Julio F. Ribeiro and 15 other prominent citizens raising various aspects of “black accounts” and also non-ratification of the UN convention. The respondents were given four weeks to submit replies. The hearing was adjourned till February 3, when Centre will have to file a fresh affidavit.