Sunanda K Datta-Ray: Doctrines of lapse

Leniency towards fiscal crimes points to a deeper malaise in our value system

Tax collection seems more full of thrills than Ian Fleming’s MI6. Jinesh S Vanzara, a practising accountant, recently told Kolkata’s Merchant Chamber of Commerce of a senior tax official, a deputy director no less, disguised in lungi and torn banyan, sleeping under a tree and smoking bidis while chatting up labourers and counting the number of lorries that entered and left the factory he was watching.

Other deputy directors worm their way into offices masquerading as courier, postman, salesman and census enumerator. Professional informants rub shoulders with imposters. The work bristles with hazards. If James Bond’s tax equivalent doesn’t also spurn tea as “a cup of mud”, the chances are the lady of the raided house will lace his tea with salt instead of sugar. Vanzara didn’t mention arsenic.

This was at an interactive session on search and seizure with T B C Rozara of the Indian Revenue Service, Director-General of Income Tax (Investigations). Vanzara went on to talk about the more serious challenge of corruption but what struck me as the outsider was how aloof this small section of the business community seemed to be from the national uproar. Five corporate chiefs, an IAS officer and several senior politicians were in jail at the time. The Supreme Court was enjoying intervening in governance. The Bharatiya Janata Party had found an issue with which to beat the government without exposing its own political weaknesses. Freelance moral crusaders like Baburao Hazare and Ramdev were prancing on a new platform in the name of a mythic civil society.

But conversation at the chamber, on and off the record, was more concerned with making tax raids gentler because evaders and defaulters aren’t so bad after all! A former president, S S Beriwala, happily disclosed in his opening remarks that “incidents of irregularities and tax evasion are on the wane and people, and particularly the business community, have come forward to declare their incomes.” The yield from taxes exceeds even the government’s revised target. Pranab Mukherjee claims a robust 26.43 per cent growth in direct tax collection.

Vanzara might quibble that only three per cent of 1.2 billion Indians pay taxes, but if Beriwala is right, Hazare need never fast again and Ramdev can return to peddling ayurvedic drugs. We are all set for the honest society. The cash element in the price of property will vanish and doctors, lawyers and accountants will demand that fees be paid only by crossed account payee cheque. The speed money age is over. India will wallow in the repatriated $1.45 trillion (Rs 300 lakh crore) in black money abroad, against China’s mere $96 billion.

An unknown Internet correspondent calculates that when this fortune comes back, there will be between Rs 50,000 and Rs 60,000 crore for each district, Rs 100 crore for each village, and Rs 2.5 lakh for each family. Think of how much money can be pocketed and salted away on the basis of Montek Singh Ahluwalia’s calculation of only 16 paise in the rupee reaching its target!

Beriwala’s plea that the tax authorities “should take a very considerate view” of “unintended lapses” might have let B S Yedyurappa off the hook. If a senior central minister can “forget” to file his income tax returns for 10 years, a chief minister can unintentionally pocket Rs 30 crore in kickbacks.

This indulgent attitude explains much that people find bewildering in public life. Fourteen Karnataka MPs and 75 MLAs wouldn’t have paraded their support for Yedyurappa if fiscal crime mattered. No, it’s not the Anglo-Saxon concept of being innocent until proved otherwise; it’s the value system that exonerated Pratap Singh Kairon as Punjab’s chief minister because he delivered. The crime is not to steal but to be caught stealing.

I could understand Rozara saying the tax dispensation is a part of society. As he also said, just as people get the government they deserve, so do people get the income tax department, personnel and methods they deserve. As R K Chandolia, A Raja’s former aide, told the CBI, the 2G spectrum scam will “die a natural death” like the Bofors affair.

sunandadr@yahoo.co.in