Black money puts govt in fix

Bilateral deals, apex court order complicate issue

The Narendra Modi government is in a bind over the black money issue.

Even after it expressed readiness to reveal the names of 627 account holders in the Geneva branch of HSBC Bank, the road ahead has to be traversed cautiously, in view of international covenants on information-sharing.

The government claimed that the first task it performed after assuming power on May 26 was to set up a special investigation team headed (SIT) by Justice M B Shah in compliance with the Supreme Court’s direction issued on July 4, 2011.

It, however, faced criticism for seeking modification of the court’s order, pleading confidentiality on disclosure of names.

The government raised questions over the court’s brief order of May 1, wherein directions were issued to disclose to black money case petitioner Ram Jethmalani the information or documents received in eight cases where no evasion of tax in India was found and investigations have been completed. With eight names becoming public, Germany has expressed surprise over the revelation, asking the government to explain the disclosure.

India refrained from signing the “Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information” at Berlin on October 29 as its confidentiality clause restricted disclosure of data.

Clarification needed

The government has claimed that clarification is required from the court in this regard since the May 1 order was not in consonance with the 2011 directions. The 2011 judgment had directed for disclosure of names in cases where prima facie evidence of wrongdoing was found or show-cause notices were issued.

The government has relied upon the same 2011 verdict, which said: “The revelation…, without establishment of prima facie grounds to accuse them (the account holders) of wrongdoing, would be a violation of their right to privacy. Details of bank accounts can be used by those who want to harass, or otherwise cause damage to, individuals.

Having faced flak for seeking modification of the order, the government submitted the list to the court, which refrained from opening the sealed envelopes and sent them to the SIT for further probe.

The decision came as a face-saver for the government. But the future course in the matter will require reconciliation between international agreements and the court’s order. The issue had the potential to dent the government’s image at the domestic front as well as at the international arena.

The government claims it has to give a commitment to its treaty partners on information-sharing that details received would be used for ascertaining tax law violation only.
DH News Service