Put in the dock by Shah Commission

Replying to the debate on the general budget on Friday, March 9, Finance Minister Pranab Mukherjee mentioned that the government was serious about the issue of bringing back “black money.” In the course of his reply, he is reported to have said that during the Emergency, he had, because of his deep concern in this regard, ordered raids on a “very important family” that he did not want to identify. He is reported to have added “it was not a fruitless raid. One tonne of primary gold with Swiss marks was discovered. Later on with the change of government, I was accused of causing Emergency excesses and was put in the dock before the Shah Commission.”

I do not know whether the tonne of gold was a figment of the Finance Minister's fertile imagination, but the allegation that he was put on the dock by the Shah Commission in any such case where major tax evasion was later established by discovery of a tonne of gold, is, to put it politely, factually incorrect. The Shah Commission dealt, inter alia, with Emergency excesses. Five of those cases related to the Income Tax department over which the present Finance Minister presided as Minister of State for Finance (Revenue).

It is necessary to mention that in spite of subsequent authoritarian measures to practically obliterate this valuable document, a few copies of the Shah Commission Report survived. The country owes a debt of gratitude to Era Sezhiyan, a great parliamentarian, for his efforts at publishing the report recently in the form of a book with an excellent introduction from him.

The five cases referred to are briefly mentioned below, with page, etc., references for those interested. The first two cases can be clubbed together. They were tax raids on two brave trade union leaders, Prabhat Kar and D.P. Chadha, general secretary and president, respectively of the All India Bank Employees Association (First Interim Report of the Commission, Chapter 7, Para 7.294 onwards at pp 93-94).

Significantly, action in this case was initiated by the then powerful Director, CBI, D. Sen. He sent for the tax official concerned, gave him the orders, which were meekly followed. The Director, CBI, later recorded a secret note which says that the two persons' houses “were got searched” and added that a report regarding the search is enclosed. In his oral testimony, Sen said that the report was sent either to O.M. Mehta, the then reasonably notorious MOS in the Home Ministry, or to R.K. Dhavan. Neither Sen nor the above two dignitaries was in anyway lawfully concerned with the Tax law or its administration. As the then Minister in charge of Revenue, Pranab Mukherjee, cannot escape responsibility for this high handed and unlawful exercise of the drastic and draconian provisions of the tax law to suppress legitimate trade union activity.

Then comes the Baroda Rayon Corporation case (Second interim Report, Chapter 9, pages 10 to 15 para 9.1 to 9.27). It will be useful to mention at the outset that the alleged one tonne of gold was not discovered or seized in this case. In fact, this raid was very similar to the drama of raids, arrests and “grilling” of persons like Suresh Kalmadi, A. Raja and other near and dear ones by the CBI, the ED and other sundry agencies.