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SC seeks details of Laloo’s income tax cases
Feels cases were disposed of in haste
S.S. Negi
Legal Correspondent

New Delhi, April 26
In a major a major setback to Railway Minister Laloo Prasad Yadav, the Supreme Court today questioned the Union Government for not filing appeals in the high court against the Income Tax Appellate Tribunal (ITAT) order exonerating him in tax violation cases, decided by the Tribunal’s Special Bench at Patna last year in a “tearing hurry”.

A Bench of Mr Justice S.N. Variava, Mr Justice S.H. Kapadia and Mr Justice A.R. Lakshaman ordered the Director-General (Investigation), Income Tax, to place before the court by May 10 his opinion and the opinion of the Additional Solicitor-General Mohan Prasaran, suggesting that no appeal needed to be filed in the income tax “violation” cases against the husband-wife duo.

The case was decided by the Special Bench created by ITAT at Patna in June last year in a span of 10 days after the UPA government came to power. The matter pertained to 25 assessment notices by the Income Tax Department to Mr Laloo and Ms Rabri for the period between 1986 and 1996.

“We would like to see it (opinions)” the Bench observed, issuing an oral direction to the Director-General (Investigation), IT, to furnish the status of the tax returns.

The ITAT president was further directed to place before the court copies of all cases disposed of by the tribunal’s Special Bench, which was constituted by sending two members from Delhi and one of the members had retired immediately after passing the order in Mr Laloo and Ms Rabri’s cases, which were heard between June 21 and July 25, 2004, and the judgement was pronounced on July 2.

The apex court directed the Patna High Court’s acting Chief Justice to constitute a Special Bench to hear petitions of Mr Laloo and Ms Rabri Devi on the question of sanction for their prosecution in the Rs 40 lakh disproportionate assets (DA) case, which formed the basis of the income tax violation cases against them.

The directions came on a public interest litigation filed by JDU MP Rajiv Ranjan Singh and BJP MP Sushil Modi, seeking cancellation of bail of Mr Laloo in the fodder scam cases for allegedly “interfering” in the judicial process.

“We want to know if the Director, Investigation, looks into the cases after they were decided by ITAT, specially when the Tax Department says that no appeal is to be filed,” the Bench told Solicitor-General G.E. Vahanvati, appearing for the Centre.

When he said 136 cases were decided by the tribunal’s Special Bench, the court expressed surprise how so many matters could be decided within 10 days when such long orders as was passed in their cases, had to be recorded after examining “so many documents”.

The court pointed out that it was strange that no appeal was filed in the cases against Mr Laloo and Ms Rabri Devi even after various “strictures” against income tax officials was passed by ITAT in its order. “It has been found in past that when there is any stricture against any of the officer in tax cases, the department prefers to file appeals, but here you say that no appeal be filed,” the court pointed out.

Earlier, Lallan and Modi’s counsel, dug holes in a series of orders passed by ITAT and its president regarding the constitution of the Special Bench, for which directions were issued on June 11 last year, allegedly under pressure from the Railway Minister.

The counsel also demonstrated from the records how ITAT’s Patna-based member, R.K. Tyagi, was sent out from the city to facilitate the constitution of the Bench of members sent from Delhi, specially for disposing of Mr Laloo and Ms Rabri’s cases.

He also demonstrated from the CBI record how a proposal was mooted to replace the agency’s Special Public Prosecutor L.R. Ansari, conducting trial in the fodder scam cases for the past eight years and a retired Delhi Police Legal adviser Oma Shankar Sharma was appointed in his place.

“All these actions of the government were tainted with malaise and absolute disregard for any rule of law and makes a fit case for the cancellation of the bail of Mr Laloo for interfering in the judicial process,” he said, adding that the way the fodder scam and tax cases against him were handled by the CBI and the Union Government, it clearly indicated that the UPA government was acting “under pressure” from the Railway Minister.

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