SC raps govt for non-action on blackmoney asks to track source

Posted By: Pti
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New Delhi, Jan 27 (PTI) Government today found itselfon the backfoot in the Supreme Court which asked why actionhas not been taken against those who have stashed blackmoneyin foreign countries and asked it to go after the source ofmoney which may be from arms deals, drug trafficking andsmuggling.

The apex court directed the government not to restrictits probe on the aspect of tax evasion only and expand itsambit by tracking the source of money which might haveoriginated from anti-national activities.

"Looking at the issue from taxation point of view isonly one aspect. Some names have been given to you in respectof a bank. What steps have you taken? Have you set law inmotion. They are Indian people and are amenable to Indianlaw," a bench comprising Justices B Sudarshan Reddy and S SNijjar said.

"That is a serious matter which we are concernedabout. You know the names, (you know) where the money islying, still you are talking about double taxation issue," thebench said, asking "What action have you taken against themwhen you came to know that they have stashed money in foreignbank(LGT Bank in Liechtenstein)."

The court''s remark came after the Solicitor GeneralGopal Subramanium submitted that the government is taking allactions under Double Taxation Avoidance Agreement (DTAA)against the people who have stashed money in foreign banks.

Asking the government not to restrict its probe onlyto the tax evasion aspect, the bench said it should track downthe sources of blackmoney.

"Why are you looking only at tax evasion issue in thismatter when there are more grievous offences associated withsuch cases. That is the most dangerous part of the story. Haveyou done anything," the court said.

The government, however, tried to convince the courtthat it is taking all possible action under internationalagreements and law against the erring persons and it has noproblems in sharing the information with the court.

The solicitor general submitted that many agencieswere working on the case and investigations were underway.

The court appeared to be not satisfied with thecontention of Subramanium and asked him to file a detailedreport by Thursday next on what action the government hastaken against people who have parked their black money inforeign land.

"What are the sources of the money? Where has themoney come from? It might be because of arms deals, smuggling,narcotics, drug trafficking or something else. These are moreserious issues, when you know the name, what action you havetaken?," the bench asked.

The court also sought replies from the government, RBIand CVC on a petition seeking direction to the government toratify UN convention on corruption which would facilitate inbringing back blackmoney from foreign banks. .

Senior advocate Anil Divan, appearing for petitioner and former Union Law Minister Ram Jethmalani, accused thegovernment of not being serious on the issue, saying thatPune-Based businessman Hasan Ali, facing probe for stashingmoney to the tune of Rs 36,000 crore in UBS Bank in Swissbank, has fled the country.

The court, after hearing Divan, asked the governmentto find out whether Ali is present in the country or has leftit.

The court was hearing a petition filed by Jethmalaniseeking direction to the government to bring back blackmoneystashed in foreign banks which, according to him, amounted toaround USD one trillion.

Besides Jethmalani, five others, including formerPunjab DGP K P S Gill and former Secretary General of LokSabha Subhash Kashyap who are petitioners, have alleged thatthe government was not taking action to bring the backblackmoney stashed in foreign banks.

NGO People''s Political Front and former top cop JulioF Riberio are also among the petitioners.

Countering the allegation of the petitioners, thegovernment submitted that it is holding discussions withvarious countries so that information regarding blackmoneycould be easily accessed.

"We are aware that blackmoney is a problem for thecountry and we are dealing with it. We have DTAA (DoubleTaxation Avoidance Treaty) with 79 countries and we havefinalised revised agreement with other countries includingSwitzerland," the SG said adding that the government has beenable to check the flow of around 34,000 crore out of thecountry.

A former Income Tax Commissioner K V M Pai alsoapproached the court seeking to assist it in dealing withBlackmoney.

The apex court had on January 19, while hearing thematter, expressed displeasure over the government''s reluctancein coming forward with full information on the blackmoneyissue, saying keeping national wealth abroad amounted to"plunder" of the country.

"It is a pure and simple theft of the national money.

We are talking about mind-boggling crime. We are not on theniceties of various treaties," the court had remarked.

The remark by the bench had been made when thesolicitor general was explaining various steps taken by thegovernment under the Double Taxation Avoidance Act.

The court had expressed unhappiness that thegovernment had filed an affidavit restricting informationrelating to the money deposited by 26 persons in LGT Bank inLiechtenstein.

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