Ascertain source of black money: SC to government
New Delhi: Government Thursday found itself on the backfoot in the Supreme Court which asked why action has not been taken against those who have stashed blackmoney in foreign countries and asked it to go after the source of money which may be from arms deals, drug trafficking and smuggling.
The apex court directed the government not to restrict its probe on the aspect of tax evasion only and expand its ambit by tracking the source of 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," a bench comprising Justices B Sudarshan Reddy and S S Nijjar said.
"That is a serious matter which we are concerned about. You know the names, (you know) where the money is lying, still you are talking about double taxation issue," the bench said, asking "What action have you taken against them when you came to know that they have stashed money in foreign bank(LGT Bank in Liechtenstein)."
The court`s remark came after the Solicitor General Gopal Subramanium submitted that the government is taking all actions under Double Taxation Avoidance Agreement (DTAA) against the people who have stashed money in foreign banks.
Asking the government not to restrict its probe only to the tax evasion aspect, the bench said it should track down the sources of blackmoney.
"Why are you looking only at tax evasion issue in this matter when there are more grievous offences associated with such cases. That is the most dangerous part of the story. Have you done anything," the court said.
The government, however, tried to convince the court that it is taking all possible action under international agreements and law against the erring persons and it has no problems in sharing the information with the court.
The solicitor general submitted that many agencies were working on the case and investigations were underway. The court appeared to be not satisfied with the contention of Subramanium and asked him to file a detailed report by Thursday next on what action the government has taken against people who have parked their black money in foreign land.
"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. These are more serious issues, when you know the name, what action you have taken?," the bench asked.
The court also sought replies from the government, RBI and CVC on a petition seeking direction to the government to ratify UN convention on corruption which would facilitate in bringing back blackmoney from foreign banks.
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