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Report No. 47

3.29. Preventive detention.-

Finally, we should refer to an important recommendation which we are making, regarding preventive detention. Our advice has been sought on the question whether persons suspected of large scale smuggling of goods or violations of foreign exchange law should be brought within the Act providing for preventive detention1.

1. The Maintenance of Internal Security Act, 1971.

3.30. While we do not regard preventive detention as in harmony with the democratic spirit, we are not unmindful of the considerations which weighed with the Constitution-makers when they authorized preventive detention-the paramount need of safeguarding certain conditions without which the country could not survive. The various topics mentioned in the specific legislative entries-such as, the defence of India, foreign affairs, security of India, security of state, maintenance of public order, and maintenance of supplies and services essential to the community-show the kind of dangers which the Constitution-makers had in mind. The common governing principle behind the specifically enumerated dangers was the survival of the nation.

3.31. That the survival of the nation may be jeopardised as much by an acute 'scarcity of essential' goods or services as by war or rebellion is evident. Threats to the national economy arising from a violation of the restrictions imposed in the interest of conserving foreign exchange could constitute an equally serious danger to the survival of the nation. Economic bankruptcy can pose as serious a problem as political insecurity; it could, conceivably, be productive of distress more severe in magnitude and to a large number of persons.

3.32. We are, therefore, of the view that so long as preventive detention exists as a permissible measure for fighting certain evils, it would be justifiable to use it as a weapon against large-scale evasion of the Customs Act or the Foreign Exchange Act. There is reason to believe that smuggling on a large scale is being carried on by persons against whom, for reasons other than the inefficiency of the enforcement staff, it has not been and may not be possible to procure such evidence as would lead to a conviction in a court of law.

3.33. Accurate figures of evasion cannot, in the very nature of things, be expected, and estimates of evasion of the laws relating to customs duties and foreign exchange are bound to be imprecise. Nevertheless, having regard to the fact that raids carried on during the last two years or so have resulted in the seizure of startlingly large stocks of smuggled goods, one can reasonably imagine the violation of both customs and foreign exchange laws must be going on in an organised manner, and that, as against each case detected and proved, there must be many others which go undetected.

3.34. We should also state here that we understand from responsible officers that smuggling carried on systematically on the borders provides a respectable outfront for espionage. It would thus appear that the three sinister activities-smuggling, spying and sabotage-could be found in company with each other. These considerations have weighed with us in recommending an amendment of the Constitution to make the position clear in this respect.

3.35. Desirability of detailed study pointed out.-

Before we conclude this chapter, we would like to mention one matter which formed the subject-matter of our discussion during the whole of this inquiry.

We have already indicated1 that the problem referred to us by the Government lay within a very narrow compass, and we decided to broaden the scope of the enquiry to some extent in order to do justice even to the narrow problem referred to us. At the end of the enquiry, we felt that time has now arrived when Government should take suitable steps to study in depth the important question of evolving one common code dealing comprehensively in one place with all social and economic offences. We venture to think that it would be useful to make a similar study in regard to different tax laws.

As our report indicates, we have evolved a rule of evidence pertaining to the shifting of onus in respect of socio-economic offences, but have refrained from recommending that the said rule should be applied to the tax laws on the ground that the tax laws are far too complex and complicated and lack stability. We feel that it is necessary that a study in depth of the tax laws should be made with a view to codifying all the laws in one common code which would be simple, clear and stable. These questions however fall outside the purview of our enquiry. Nevertheless, we thought it was our duty to invite the attention of the Government to them.

1. Chapter 2, supra.

3.36. Observations as to taxation laws-Points referred to Wanchoo Commission.-

It is also necessary to refer to one matter, namely, the suggestions referred to us for enhancing the penalties and punishments leviable under the tax statutes, as we felt that we ought to make some general observations. We understand that another Commission headed by Mr. K.N. Wanchoo, former Chief Justice of India, has been entrusted with the task of considering in depth and comprehensively the problem pertaining to the amendment of the provisions of the Income-Tax Act, and that the said Commission has already made an exhaustive report in that behalf.

The Report has not yet been published. Nevertheless, some of the questions pertaining to the effective enforcement of the penal provisions of the tax statutes, which have been referred to us in a limited form, must have been considered by the Wanchoo Commission; and that makes our task in dealing with the problem referred to us somewhat difficult and embarrassing. However, since a reference has been made to us with regard to the suggestion to enhance the penalties and punishments under the tax statutes, we shall make our recommendations very briefly, in respect of the points for our consideration.

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