RAID!!!

Written by  //  November 2, 2010  //  Law & The Judiciary  //  1 Comment

(This is an unusually cynical post prompted by sustained exposure to the two most corrupt places in this country; Bengaluru and Delhi, displaying their corruption for all to see and revelling in it, proudly. [Exhibit 1 and Exhibit 2]. Mumbai, on the other hand, has just challenged the above, and perhaps will occupy the hallowed top spot with Bengaluru and Delhi. I shall revert to wide-eyed Supreme Court “fact-ion” soon.)

I don’t consider myself clairvoyant, but even I predicted this headline and this news story about a week before they happened. Income Tax Department Raids Reddy Brothers; Finds nothing. In fact, most people in Bengaluru and Bellary would have been surprised if anything at all would have been found. It is a freely discussed and fairly open “secret” that State and Central Government officials have long been in the pocket of iron ore barons (not just the Reddy brothers [Janardhana Reddy, Karunakara Reddy and their trusted lieutenant, B Sriramulu], in case you think I am being partisan against the poor dears). The sudden profusion of luxury cars, luxury apartments and luxury pretty much everything else sort of surprised us initially but it wasn’t long before we knew what was going, and as with everything else, we shrugged and continued to move along (except for one who refused to shrug and move along).

Not that the iron ore barons (almost evenly distributed among the political spectrum in Karnataka) were out of the Income Tax Department’s sights. We would hear of or read about the odd raid here and there in Bengaluru and elsewhere on the premises of one of the barons and predictably, empty cupboards would greet our ever diligent Revenue officers. An acquaintance once told me how the wife of one of the mining barons distributed her jewellery across the city, in the safe custody of her friends, days before the IT Department raided her house. This is obviously hearsay, but it is not impossible to believe that “advance notice” of the raid had been received by all concerned.

The modus operandi of the Reddy brothers, on the other hand, is less subtle and more obvious. Upon gaining political office, they ensured that every one of the officials posted to Bellary district (their almost unquestioned fiefdom) were totally and entirely under their thumb and any officer with a backbone was transferred straight out of the district. No messy business of having to sanitize the premises or hide one’s assets when the Government and all its machinery is at your beck and call.

The raids of 25th October were therefore only a mild nuisance for the likes of the Reddy Brothers.

On the subject of raids, I am also reminded of a conversation I had with a couple of officials from the Revenue Department when they were briefing us about a case concerning large scale Excise Duty evasion. While discussing the facts of the case, it was mentioned that the information, which later formed the subject matter of the show cause notice and eventual prosecution and hefty duty demand, was all obtained after a series of raids carried out on multiple premises of the duty evaders. I naturally asked them how the raid came about. [Obviously this is not a full transcript and obviously I have changed some details here and there]

“Well, actually, we formed several teams and…”

“No, no, I meant how did you find out that these guys should be raided and what to look for.”

“Ah that”, they looked at each other and smiled.

“Well, in all such large scale duty evasion, it is never the handiwork of one or two people.”

“There are always many number of people working over a long period of time, who enjoy the trust and confidence of the core group.” Piped in the other officer.

“Even though all of them are not always in the know about everything that’s going on, most of them know vaguely what’s going on and sort of guess the rest.” Now they had tag-teamed because the story was just too good to be told by one person ala Thomson and Thompson.

“For instance, the manufacturers are in cahoots with the raw material producers and the end users to undervalue and disclose wrong figures about the goods.”

“…and some trusted employees will actually fill in the forms and the fake invoices to make sure goods escape duty…”

“…and also, the drivers of the vehicles know they are carrying far more than the goods indicated on all the permits and invoices with them.”

“It works because they all get a cut and they all enjoy the confidence and trust of the members of the key planners of the scam.”

“But of course, some time, some where, someone slips up.”

“You mean they don’t do what they are told?”

“No, no, they do exactly as they are told, but sometimes their employers get angry over something, cut their pay, shout at them or publicly humiliate them or provoke their employees and workers over something.”

“…and to get back at their employers, the employees come straight to us and spill the beans.”

“Naturally, we turn a blind eye to their role and go after the principal plotters and their accomplices and that is where the scam is unravelled.”

“This fellow [referring to the case at hand] probably did some such thing to our informant, and lived to regret it. See, he’s learnt his lesson, that is why he has already paid the penalty on behalf of his employees and is challenging only the main duty demand.” He pointed out in the paper book.

“Ah, so the start of every raid is an aggreived employee.” I thought out loud.

“Yes, yes…” they both nodded, grinning.

“But tell me something, on so many occasions the raids turn up absolutely nothing. What goes wrong in such cases?” I asked, thinking of the earlier story of the wife of the mining baron and her jewellery.

“Well…” they looked at each other sheepishly.

“… the Department also has its share of aggrieved employees.”

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A Supreme Court/Delhi High Court lawyer who writes a bit with a potentially fatal weakness for hyperlinks, tags, and the reader's approval. Follow @alokpi

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