Govt gets another SC rap over black money

There was more embarrassment for the UPA government on the issue of black money parked in foreign banks as the Supreme Court, on Thursday, virtually questioned the Centre’s intentions over not going after the source of slush money.

“You know the names, (you know) where the money is lying,” a Bench comprising justices B Sudarshan Reddy and S S Nijjar observed while wanting to know what action the government had taken to unearth the foreign accounts.

“We want to know what steps you have taken against the people who have accumulated so much money in foreign banks. What are the sources of the money,” the Bench asked solicitor general Gopal Subramanium during a hearing on a petition filed by former law minister Ram Jethmalani.

The government had earlier cited international agreements and other legal hurdles to claim it was unable to reveal the names of Indian account holders in foreign banks. Wondering about the source of the money parked abroad, the Bench asked: “What are the sources of the money? Where has the money come from? It might be because of arms deals, smuggling, narcotics, drug trafficking or something else.”

The court directed the government not to restrict its probe solely to the aspect of tax evasion by the account holders and expand its ambit by tracking the source of the money which might have originated from anti-national activities.

“Looking at the issue from taxation point of view is only one aspect. Some names have been given to you in respect of a bank. What steps have you taken? Have you set law in motion. They are Indian people and are amenable to Indian law,” the Bench said.
Estimates peg the total amount of money stashed away by wealthy Indians and companies abroad in the rage of $500 billion and $1.4 trillion.

Directing the government to file its response by Thursday next, the court also sought replies from the RBI and the Central Vigilance Commission on a petition seeking direction to the government to ratify United Nations convention on corruption which would facilitate  bringing back black money from foreign banks.

Speaking for the government, Solicitor General Gopal Subramanium submitted that the government was taking all actions under Double Taxation Avoidance Agreement (DTAA) against the people who have stashed money in foreign banks. However, hardening its stand, the court observed, “You know the names, (you know) where the money is lying, still you are talking about double taxation issue,” the Bench said.

The Solicitor General submitted that the government was taking action under international agreements and the law against the erring persons and it has no problems in sharing the information with the court.

Senior advocate Anil Divan, appearing for petitioner and former Union Law Minister Ram Jethmalani, accused the government of not being serious on the issue, saying that Pune-Based businessman Hasan Ali, facing probe for his foreign bank accounts, has fled the country.

The court, after hearing Divan, asked the government to find out whether Ali is present in the country or has left it.