9911796707
TMI Blog1984 (10) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... to the tax affairs of Pawar received by the Commissioner between December, 1978, and January, 1979, or during any other period, whether anonymous or otherwise, together with the enquiry papers. Pawar was occupying some portion of 34/4, Kacharewadi, Erandawane, and Shantaram, Shamkant and Vithal Ambekar were occupying the remaining portion. Shantaram was a licensed surveyor and Shamkant and Vithal were his sons. The Ambekar family belonged to the Brahmin caste, while Pawar-a Maratha-had taken a Brahmin girl from Bhave family as his bride. Pawar feels that the grisly banner of casteism soured their relationships and Ambekar family started terrorising and tormenting the Pawars by scoffing and jeering at them and hurling abuses even at the children. Pawar learnt that Shantaram and his sons maliciously filed complaints to the Income-tax Department that Pawar is a prosperous contractor who often throws ostentatious dinners and is evading income-tax. The Ambekars allegedly filed similar complaints to other law enforcement authorities which are not relevant for the present proceedings. The Income-tax Authorities made enquiries which, however discreet, have a tendency to spread by wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prejudicial to public interest was given a judicial imprimatur. An earlier Privy Council case of Robinson v. State of South Australia [1931] All ER 333; [1931] AC 704, in which the judicial Committee remitted the case to the Supreme Court of South Australia with a direction that it was one proper for the exercise of court's power of inspecting documents in order to determine whether their production would be prejudicial to public welfare was disapproved in Duncan. In spite of this disapproval, the courts in Commonwealth countries continued to follow the principles of Robinson in preference to those of Duncan. (Canada: R v. Snider [1953] 2 DLR 9 ; New Zealand: Corbett v. Social Security Commission [1962] NZLR 878 and Australia: Bruce v. Waldron [1963] VLR 3). Then came the celebrated case of Conway v. Rimmer [1967] 1 WLR 1031 ; 2 All ER 1260 (CA) in which Lord Denning in a powerful dissent refused to follow Duncan as respects non-production of a class of documents even for the inspection of the court and his dissent was upheld by the House of Lords in Conway v. Rimmer [1968] 1 All ER 874; 2 WLR 998. Conway's case had its echo in the judgments of our Supreme Court also. State of P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s essential to the proper and efficient conduct of the investigatory work which the commissioners have to carry out in cases of the instant kind that they should be able to receive and test such communications made fully, frankly and in confidence. If it were to become known that disclosure of such communications could be compelled in circumstances such as the present, investigations would, in my view, be hampered by the unwillingness of members of the staff of the trader concerned, or of other traders under comparison, or the staff of such other traders to give information, and the hesitation of the Commissioners' own Officers to receive and comment on such information. " Forbes J. before whom the affidavit was filed, said that the affidavit of the Chairman of the Central Board of Taxes meant that some of the information on which the Commissioners based their fair and impartial valuation consists of statements by third parties who will be prepared to make allegations behind another trader's back but would be afraid to do so to his face. Forbes J. condemned this attitude of the Revenue in no uncertain terms (p. 370) : " I find this alarming ... It appears that for the last 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of public interest and trust the head of the department concerned to do what he could to mitigate the ill-effects of non-disclosure. As regards the observation of Forbes J. who was impressed by the possible ill-effects of non-disclosure, Lord Cross felt [1973] 2 All ER 1169 (at p. 1185); [1973] 3 WLR 268 at p. 285: " ... he failed to appreciate how reasonable Sir Louis' objections to disclosure were and dismissed them with the remark: 'We are not living in the early days of the Tudor administration.' I do not regard Sir Louis as a modern Cardinal Morton. His objections to disclosure were taken in the interests of the third parties concerned as much as in the interests of the Commissioners .... .." If the views of Forbes J. came for criticism by both the appeal courts, the views of Lord Lyndhurst L.C., expressed a century ago in Smith v. The East India Company [1841] 1 Phill 50, who refused to order production of correspondence between the Court of Directors and the Board of Control in a purely commercial suit were likewise questioned by Lord Reid in Conway v. Rimmer [1968] 1 All ER 874 (at p. 883): " We now know and Lord Lyndhurst's long political experience must have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are revealed, then people will be put off from providing information. The public interest in the prosecution of a person's ill-treating children depends on the provision of this information and outweighs the public interest in its disclosure. Scarman L.J. repelled this argument [1978] AC 171 (HL) (at pp. 199-200): "... it has to be accepted that some may be deterred from giving information to the N.S.P.C.C., if Crown privilege cannot be claimed. This is a loss which could be damaging to the public interest. But the damage has to be considered in a wider context even than the welfare of children. What sort of society is the law to reflect? If it be an open society, then men must be prepared to face the consequences of giving information to bodies such as the N.S.P.C.C., protected as they will be by the promise of the N.S.P.C.C., not to disclose their sources of information save when compelled by law in subsequent legal proceedings to do so, and by the defence of qualified privilege available to them in the event of a defamation suit. If it be a society in which as a general rule, informers may invoke the public interest to protect their anonymity, the law may be found to enc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment must be the rule and secrecy, an exception justified only where the strictest requirement of public interest so demands. The approach of the court must be to attenuate the area of secrecy as much as possible consistently with the requirement of public interest, bearing in mind all the time that disclosure also serves an important aspect of public interest. " Though strong condemnatory words like "Star-Chamber", "shameful episode", "early days of Tudor administration" have sometimes been used to dismiss the claim of privilege, the courts have finally veered round to the view that it is essentially a matter of balancing of the two public interests involved and to see whether the public interest in disclosure will outweigh the larger public interest in preserving the secrecy of the document. "It was as true as taxes is and nothing is truer than them " has lost none of its relevance in modern times. The Indian record of debt-servicing in International Monetary Circles-unlike that of some Latin American countries has been exemplary and that can only be maintained by proper resources mobilisation. A nation, like an army, marches on its stomach and not on brave words. Once ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h may not be the case every time the Department acts in making inquiries about tax evasion. It will have to be left to the good sense and administrative experience of those charged with the duty of collecting tax or preventing tax evasion as to how they should manage their affairs in the matter of reliance to be placed on source of information or information passed on by anonymous letter-writers, and whether and in what manner they should cross-check the information. This may sound like putting a touching faith in those charged with the duty of tax collection, but when admittedly courts have no experience in this executive field where secrecy is the soul of operations, why try to make suggestions to be dubbed at a later date as brutum fulman ? In the facts of the present case, we uphold the public interest privilege claimed by the Secretary in the Ministry of Finance. We would not wish to be thought that we regard the balancing test of the two public interests involved as a test of uniform application to all types of cases, including criminal cases, where the disclosure of the name of the informant is necessary to prove the innocence of the accused. Quite the contrary. In a crim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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