PTI
New Delhi
Violation of state tax laws like VAT should be made a predicate offence attracting action under anti-money laundering laws by agencies like ED which will act as a deterrent against economic crimes, the Vice Chairman of Special Investigation Team (SIT) on black money said Saturday.
The Union government, only last year, widened the category of predicate offences and included offshore tax evasion as a criminal offence based on which the ED has been empowered to slap the stringent Prevention of Money Laundering Act (PMLA) against offenders.
SIT Vice Chairman Justice (retd) Arijit Pasayat, who was delivering key note address during an ED event, also rejected criticism that probe agencies were slow, saying they need to be meticulous so that they can stand the scrutiny of law and obtain convictions, or else the criminals will take advantage.
He also said that probe agencies working under the high-power panel have revealed “horrifying” figures where it was found that there are “97,000 people who are Directors in more than 20 companies and 2,000 others are in this position in more than 100 companies in the country in gross violation of laws”.
This despite the fact that there is a provision in the Companies Act that you cannot be a Director in more than 20 companies.
Referring to the money laundering Act, he said it “has a peculiar feature that it does not act on its own. Only when a predicate offence is committed then only the ED is triggered... you have murder and attempt to murder in those offences but unfortunately tax offences were not and are still not (in that category).
“Major of them (tax offences) are predicate offences.
There is a need for that (to include them in predicate offences list).
“Somebody who does not file his income tax return correctly and suppresses his Rs 10,000 crore income actually murders the financial stability of the country. That fellow has to be properly tackled,” Pasayat said.
The term predicate offence denotes the registration of a crime under IPC or CrPC provisions which is later taken cognisance by ED to invoke the PMLA against the same accused.
On the the probe being carried out in the 'Panama Papers' disclosure, where about 500 Indians have been named, Pasayat said the agencies are undertaking a “verification” of all such individuals and entities.
Pasayat, who along with SIT Chairman Justice (retd) M B Shah periodically reviews the work of at least eleven probe agencies in the country, also rued the fact that punishment for committing different quantum of economic crimes is on an equal footing in India.
“A man who takes a bribe of Rs 20 gets one year and a man who takes a bribe of Rs 300 crore also gets one year. That is the tragedy in this country,” he said.
Pasayat said there cannot be a “Taliban-style” quick investigation of financial crimes in the country and the probe agencies should do be allowed to do their work “systematically and methodically” so that they can obtain good convictions and stand the scrutiny of law.
He added another area of practical difficulty for such agencies is lack of proper infrastructure.
“Problem is people expect too much from the agencies...,” he said.
