Black money: Is SC just playing to public gallery?

R JagannathanFirstpost.com

Has the Supreme Court bitten off more than it can chew in the illegal foreign accounts case?

It is difficult to escape the impression that the apex court is playing to the public gallery, given the high emotions and expectations aroused in the public mind about huge hoards of black money held abroad. The Supreme Court itself does not seem sure whether it is just interested in a name-and-shame routine, or believes it can get the money back on its own, since governments (both UPA and NDA) have been pussyfooting around the issue.

While no one needs to hold a brief for reluctant governments and illegal account holders, there are a few areas of disquiet, given the way the Supreme Court has handled the issue so far.

One, while it is par-for-the-course for politicians to make wild accusations against individuals during election-time, the court’s job is not to pander to public expectations, but protect the constitution. In this whole name-and-shame game, has the court given adequate thought to the possibility that some of the 627 names on the HSBC Swiss bank list of account-holders may be legitimate? Is their right to privacy and reputation not important in a country run by the rule of law? Can the court guarantee that no reputation will be damaged unfairly in the process?

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Two, is the court aware of the way it is riding roughshod over the executive? Consider what the Chief Justice, HL Dattu, said yesterday (28 October) in open court when the government’s counsel pointed out that it had to respect the understandings reached with foreign countries on sharing tax information: “You do not do anything. Just pass the information of account holders to us and we will pass an order for further probe,”Business Standard reported. The Hindu quoted the bench thus: “We will decide whether to order a CBI or an income tax probe or entrust the probe to some other agency. We can’t leave the issue of bringing back black money to the government.”

This is appalling. Is it the court’s job to tell who does what? If you ask the man on the street, surely he will say yes, since the credibility of politicians is low in this matter. But, as Attorney General Mukul Rohatgi, pointed out: “Then the court must also take the responsibility of getting information in the future.”

Three, there are implications for policy. As I have repeatedly noted, black money is defined by what a policy calls legal or illegal. A changed law can make what was illegal earlier legal today. There can be legitimate Swiss bank accounts and illegitimate ones. Moreover, a government interested in pursuing a pragmatic policy may want to offer amnesty to former tax evaders and illegal account holders even while closing the loopholes to prevent future evasion. By getting directly into the game of locating black money, the court may be tying the government’s hands forever in this area. The higher courts have upheld amnesty schemes in the past, and almost every year there is some kind of amnesty scheme underway. The amnesty for service tax evaders was available last year and this year. Will the court now say go after these “crooks”?

Four, tax treaties and agreements with foreign governments are bang in the executive’s domain – and that of the legislature. Can the Supreme Court muscle into it just like that? What precedent is it setting for the future? Any populist judge can then order the government to do this and that without regard to the separation of powers that are enshrined in the constitution.

Five, in the normal course of things, agencies such as the Enforcement Directorate, the Directorate of Revenue Intelligence and the tax authorities should be autonomous to do their job, while nominally remaining under the executive. Now, many of these agencies are being directed by a court-appointed SIT.  Maybe, in this case, it a good thing, but there are pitfalls ahead: how will these agencies be accountable to anyone if the court can by its own orders make them report to someone it chooses?

The Supreme Court should not need reminding that in India the constitution is supreme, not the courts or the executive or the legislature. Each of the arms has its own space and rights and responsibilities. If elected politicians cannot be trusted to do their public duty, why should we believe judges appointed by an opaque collegium system can?

The apex court should ponder over where it is taking the country. It should not try and extend its brief to untenable areas.

The writer is editor-in-chief, digital and publishing, Network18 Group