The central government has tenaciously rejected the demand for the disclosure of names of Indians who have stashed away black money in foreign banks, despite Supreme Court judges grilling it relentlessly today.
The bench consisting of Justice Sudershan Reddy and Justice S S Nijjar remarked that the “mind-boggling” amounts kept in those safe havens were fruits of crime; “It is pure and simple theft; niceties of double taxation treaties do not apply here.”
Solicitor General Gopal Subramanium tried to defend the secrecy around the names handed over to the judges in a sealed cover today. He invoked the “confidentiality” of the contents because of the treaties between India and other countries. If the names and other details were disclosed now, the terms of those treaties will be broken and other treaty countries will not cooperate in future investigations in tracking tax dodging. Whatever information was available with the government has been given to the bench, counsel said.
The judges observed that the question was not about tax avoidance, but “plunder” of the people’s money. The government cannot invoke the niceties of the Double Taxation Avoidance Treaty to block information on illegal money hidden in foreign banks.
The court was hearing a petition moved by former law minister and noted criminal lawyer Ram Jethmalani, seeking the disclosure and repatriation of huge sums kept by Indians in foreign banks. The government has so far given only 26 names to the judges, on deposits in the Liechtenstein Bank of Germany. When the judges repeatedly asked the government whether that was all the information it had about foreign accounts, the counsel said the government was ready to file a “status report” on the probe, which is continuing.
Arguing on behalf of Jethmalani, senior counsel Anil Divan stated the treaty would not come in the way of disclosure of those who had money in foreign banks because the treaty was about taxation. “But here we are dealing with money which might be from arms deals, narcotics and meant for terrorist activities,” the counsel said.
In the case of the German bank, the German government was willing to provide the names of the account holders for the asking, after a whistle blower in that country uncovered the accounts. Still, the Indian government had not sought or disclosed the names of the account holders. The counsel said the government and some clever bureaucrats were showing the whole affair as a tax avoidance exercise, while the source of money is crime.
He alleged the government was a laggard in its investigation for over a year since the petition was filed. Hasan Ali Khan, a Pune-based trader, has not been prosecuted despite holding fake passports and huge foreign deposits traced to him.
The counsel cited several Supreme Court judgments which asserted the duty of the government to disclose information which the people had a right to know. Even under the Right to Information Act, the government has a duty to be transparent, Divan said. The hearing was incomplete and it will be resumed next Thursday.