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[ULC – 03]

IN THE HON’BLE SUPREME COURT

OF

BRITUSSIA

WRIT PETITION NO: _____/2015

[UNDER ART. 32 OF THE CONSTITUTION OF INDIA]

--IN THE MATTER OF--

AMERSIA ASSOCIATION ……….…………PETITIONER

VERSUS

UNION OF BRITUSSIA ....……………RESPONDENT

XIX ALL INDIA MOOT COURT COMPETITION, 2015

MEMORANDUM ON BEHALF OF THE RESPONDENTS

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TABLE OF CONTENTS

TABLE OF CONTENTS………………………………………………..………… ...…………...I LIST OF ABBREVIATIONS………………………………………..…..……… ……………....III INDEX OF AUTHORITIES…………………………………………....………… …………......III STATEMENT OF JURISDICTION………………………………...…..…………………………IX

STATEMENT OF FACTS…………………………………………...…..………………...……..X

ISSUES OF CONSIDERATION………………………………..……………………………..….XI

SUMMARY OF ARGUMENTS………………………………..………………………………..XII

WRITTEN SUBMISSION.…………………………………...…………………………………..1

1. Whether the petitioner has a locus standi?..............................................................................1

1.1. That there was neither any infringement of fundamental right nor were such infringements

imminent.................................................................................................................................1

1.2. That there is abuse of process by the petitioner.....................................................................2

1.3. Conclusion for the First Issue................................................................................................4

2. Whether the instant writ petition is premature?......................................................................4

2.1. That, the cause has not yet become mature............................................................................4

2.2. That, No order has yet been issued to the prejudice of the petitioner....................................5

2.3. Conclusion for the Second Issue.............................................................................................7

3. Whether there was any violation of fundamental rights by the actions of respondents under

the DTAA?.................................................................................................................................7

3.1. That, merely the absence of the “opportunity of being heard” before sharing the

information is not violative of any fundamental rights guaranteed under the constitution....7

3.2. In Arguendo, the information shared by the Britussia under the DTAA does not interfere

with the Right to Privacy of any individual..........................................................................10

3.3. Conclusion for the Third Issue.............................................................................................15

4. Whether Article 26 of DTAA was liable to be struck down as it was beyond the power the

Government under Section 90 of the Income Tax Act of Britussia?.................................15

4.1. That, Article 26 of DTAA is in accordance with the provisions of Section 90 of the Income

Tax Act, 1961........................................................................................................................15

4.2. Assuming Arguendo, even in case of inconsistency between Art. 26 of DTAA and S. 90 of

IT Act, former will prevail over the latter.............................................................................18



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4.3. Conclusion for the Fourth Issue..........................................................................................20

5. Whether Treaty Making and Treaty complying powers of the Executive can be judicially

reviewed?................................................................................................................................ 20

5.1. That, treaty complying power is within the domain of executive..........................................20

5.2. That Courts are not to interfere with the economic policies of the government which is the

function of experts.................................................................................................................22

5.3. Conclusion for the Fifth Issue...............................................................................................24

PRAYER …………………………………………………………………………………….XIV



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INDEX OF AUTHORITIES

LIST OF STATUTES/REGULATIONS/RULES

1. The Constitution of India, 1950.

2. Income Tax Act, 1961

3. International Covenant on Civil and Political Rights, 1966.

4. Universal Declaration of Human Rights, 1948.

5. Indo-Hungary DTAA, Notification No: GSR 197(E), dated 31/03/2005.

LIST OF ABBREVIATIONS AND ACRONYMS

AIR All India Reporter

A. P. Andhra Pradesh

Art. Article

& And

Anr. Another

Bom. Bombay

Del. Delhi

DTAA Double Taxation Avoidance Agreement

Ed. Edition

Govt. Government

HLR Harward Law Review.

Kan. Karnataka

Ltd. Limited

Mad. Madras

Ors. Others

¶ Paragraph

Sec. Section

SC Supreme Court

SCC Supreme Court Cases



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i.e. that is

v. versus

vol. Volume

BOOKS AND COMMENTARIES

1. D. D Basu., Shorter Constitution of India”, 13th Ed., Rep.(2006), Wadhwa and

Company, Nagpur.

2. Dr. J.J.R. Upadhyaya, Administrative Law, 7th

ed.(2009), Central Law Agency,

Allahabad.

3. Dr. Vinod K. Singhania & Dr. Kapil Singhania., ‘Taxmann’s Direct Taxes Law and

Practice’, 52nd Ed., (2014).

4. Sampat Jain “Public Interest Litigation”, 2nd

Ed.(2003), Deep and Deep Publications,

Delhi.

5. G.G. Singh, “Principles of Statutory Interpretation”, 12th Ed.,Rep. (2011), Lexis Nexis

Butterworths Wadhwa Nagpur.

6. C.K. Takwani “Lectures on Administrative Law” 5th Ed.(2002), Eastern Book Company,

Lucknow.

7. B.L. Wadhera. “Public Interest Litigation” 4th Ed. (2014), Universal Law Publishing Co.

Pvt. Ltd. Delhi.

DICTIONARIES

1. A. G. Bryan , ‘Black’s Law Dictionary’, 9th Ed., 2009, West Group.

2. Daniel Greenberg, ‘Strouds Judicial Dictionary of Words and Phrases’, 7th Ed. Sweet and

Maxwell Co.

3. P. Ramanatha., ‘Concise Law Dictionary’, 3rd Ed., Rep. 2006, Wadhwa, Nagpur.

ELECTRONIC MEDIUM

1. http://www.manupatra.com (browsed on 10/01/15, 18/01/15, 28/12/14, 08/12/14, 20/01/15)

2. http://www.jstor.com (browsed on 21/12/14)

3. http://www.mca.gov.in (browsed on 22/12/14, 08/01/15, 18/01/15)

4. http://www.sebi.gov.in (browsed on 23/12/14, 10/01/15, 20/12/14)

5. http://www.lexusnexus.com/in/legal (browsed on 5/01/15, 8/01/15)

http://www.lexusnexus.com/in/legal



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LIST OF CASES

1. Ajay Hasia v. Khalid Mujib Sehravardi, AIR 1981 SC 487 (¶ 16, 19)...............................8

2. Anuj Garg v Hotel Association of India, (2008) 3 SCC 1 (¶ 36 & 51).............................14

3. Ashok Kumar Pandey v. The State of West Bengal, AIR 2004 SC 280.............................3

4. Bachan Singh v. State of Punjab, AIR 1982 SC 1325.........................................................8

5. Balmadies Plantations Ltd. and Anr. v. The State of Tamil Nadu,1972 AIR SC 2240.......6

6. Bar Council of India v. High Court of Kerala, (2004) 5 SCC 311,323...............................8

7. Basudeo Tiwary v Sido Kanhu University, (1998) 8 SCC 194: AIR 1998 SC 3261……..7

8. Bokaro and Ramgur Ltd. v. The State of Bihar and Anr., 1963 AIR SC 516…………….6

9. Brij Bhushan v. State of J. & K., AIR 1986 SC 1003……………………………………10

10. C.B.I. A H.D., Patna v. Brij Bhusan Prasad, JT (2001) 8 SC 348……………………….16

11. Calcutta Gas Co. Ltd. V. State of West Bengal, AIR 1962 SC 1044……………………..1

12. California Bankers Association vs. Shultz, 416 U.S. 21 (1974)…………………………11

13. Chanan Singh v. Co-op. Societies, Punjab and Ors, 1976 AIR SC 1821………………..10

14. Chandra Sekhar Singh Bhoi etc. v. The State of Orissa etc, 1970 AIR SC 398…………..6

15. Chhetriya Pardushan Mukti Sangharsh Samiti v. State of U. P., (1990) 4 SCC 4493.........3

16. Chintamani Rao v.State Of M.P, AIR 1951 SC 118...........................................................3

17. Commissioner of Income Tax v. Davy Ashmore India Ltd., 1991 190 ITR 626 Cal……17

18. Council of Civil Service Unions & Ors. v. Minister for the Civil Service, 1985 ACC

374........................................................................................................................................8

19. D.T.C. v Mazdoor Union D.T.C., A.I.R. 1991 SC 101................................................7 & 8

20. Debrajan Ray v. Comptroller and Auditor General of India, AIR 1985 SC 306...............20

21. Distt. Registrar Collector v. Canara Bank, (2005) 1 SCC 496............................................2

22. Dudgeon v. United Kingdom, Application No. 7525/76,ECHR, (Series A, No. 45)(

¶53)(23 September 1981)...................................................................................................12

23. Cr`emieux v. France (Application No.11471/85) ECHR (Series A No 256B), ¶ 35(25th

February 1993)...................................................................................................................13

24. Executive Engineer, Bihar State Housing Board v. Ramesh Kumar Singh and Ors., 1996

AIR SC 691 : 1996 SCC (1) 327.........................................................................................6

25. Express Newspapers Pvt. Ltd. v UOI, AIR 1986 SC 872..................................................21

26. F.C.I. v. M/s Kamdhenu Cattle Feed Industries, (1993) 1 SCC 71.....................................8



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27. Gaskin vs. The United Kingdom, European Application No. 10454/83, ECHR, (ser. A,

No 160), (¶42) (7th July 1989)..........................................................................................12

28. General of Gambia v. N’Jie, (1961) AC 617 (634).............................................................6

29. Dr. G. Sarana v. University of Lucknow and Ors., 1976 AIR SC 2428..............................6

30. Heinz India Private Ltd. v. Glazo Smithkline Consumer Healthcare Ltd., AIR 2008

(NOC) 1228 (Cal)..............................................................................................................16

31. Income Tax v. R.M. Muthaiah,1993 202 ITR 508 Karn...................................................18

32. India Cement Ltd. & Ors. v. Union of India & Ors., (1990) 4 SCC 356...........................22

33. Indravadan H. Shah v. State of Gujrat, AIR 1986 SC 1035................................................8

34. JH. Rayner (Mincing Lane) Ltd. v. Department of Trade and Industry, 1990 (2) A.C. 418

(H.L.)……………………………………………………………………………………..21

35. John N. Gladden v. Her Majesty the Queen, 85 DTC 5188..............................................16

36. Kasturi Lal Lakshmi Reddy (M/s.) v. State of J. & K., AIR 1980 SC 1992 (¶ 14).……..10

37. Kharak Singh v. State of U.P., AIR 1963 SC 1295(1300)………………………………...2

38. Klass & Others v. Germany(Application No. 5029/71), ECHR (Series A No 28),¶ 21(6th

September 1978)………………………………………………………………………....12

39. Laxmi Khandsari etc. v. State of U.P. and Ors., 1981 AIR SC 873, 1981 SCR (3) 92..….6

40. M.P. Electricity Board, Jabalpur v. Harsh Wood Products, (1996) 4 SCC 522 ………….7

41. Maganbhai Ishwarbhai Patel v. Union of India (1970) 3 SCC 400 AIR 1969 SC 783)...21

42. Maharashtra State Board of Secondary & Higher Secondary Education & Anr. v. Paritosh

Bhupeshkumar Sheth & Ors..............................................................................................20

43. Mc. Dowell & Co. Ltd. v. Commercial Tax Officer, AIR 1886 SC 649...........................12

44. Morey v. Doud 354 Us 457................................................................................................22

45. Mr. ‘X’ v Hospital ‘Z’, AIR 1995 SC 495.........................................................................10

46. Mrs. Kunda S. Kadam and Ors. v. Dr. K. K. Soman and Ors, AIR 1980 SC 881...............6

47. Navyoti Co-Group Housing Society v. Union of India & Ors., AIR 1993 SC 155.............9

48. Nagraj K. v. State of A. P., AIR 1985 SC 551...................................................................21

49. Niemietz v .Germany, Application No. 13710/88, European Court of Human Rights,

(Ser. A, No 251B), (¶ 27-33) (16th December 1992)........................................................11

50. Om Prakash v .State of J. & K., AIR 1981 SC 1001.........................................................21

51. P.G. & J.H. v. the United Kingdom,(Application No. 44787/98), ECHR (Series A

No.2001-IX), §56 (25th September 2001).........................................................................13



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52. Peck v. United Kingdom, Application No. 44647/98ECHR, (ser. A), (¶78) (2003).........12

53. People’s Union for Civil Liberties v. Union of India, AIR 1997 SC 568..........................10

54. Pradeep Jain v UOI, AIR 1984 SC 1420 (¶ 10, 13).............................................................8

55. Prag Ice and Oil Mills and Anr. Union of India, 1963 AIR SC 516....................................6

56. R in Schmidt v Secretary of State for Home Affairs, [1969] 2 Ch 149 (CA)......................8

57. R. G. High Court of Madras v. R. Gandhi & Ors., LNIND 2014 SC 818...........................4

58. R.K. Garg v. Union of India & Ors, AIR 1981 SC 2138...................................................22

59. Rainbow Steels Ltd. v. Sales Tax Commissioner, U.P., AIR 1981 SC 2101....................16

60. Ram Jethmalani & Ors. v. Union of India & Ors., (2011) 8 SCC 1..................................10

61. Ram Pravesh Singh & Ors. v. State of Bihar & Ors., 2006 (8) SCJ 721.............................9

62. Ramana Dayaram Shetty v. I.A.A.I., A.I.R. 1979 SC 1628 (¶ 10, 21)..............................8

63. Ramsharan Autyanuprasi v. Union of India, AIR 1989 SC 549..........................................3

64. Rustomjee v. R., (1876). 2.Q.B.D......................................................................................21

65. Sachidanand Pandey v. State of West Bengal (1987) 2 SCC 295…………………………………….2

66. Special Director and Anr. v. Mohd. Ghulam Ghouse and Anr., AIR 2004 SC 1467………..6

67. State of Bombay v. Hospital Mazdoor Sabha, AIR 1960 SC 610....................................16

68. State of Haryana and Ors. v. Ch.Bhajan Lal and Ors., 1992 AIR SC 604.........................6

69. State of M.P. & Ors. Vs. Nandlal Faiswal & Ors, 1987 AIR SC 25.................................21

70. State of U.P. v. Sh. Brahm Datt Sharma and Anr., AIR 1987 SC 944................................6

71. Subhash Kumar v. State of Bihar, (1991) 1 SCC 598: AIR 1991 SC 420...........................3

72. Tirlok Singh & Co. v. District Magistrate Lucknow, AIR 1976 SC 1988..........................5

73. Toonen v Australia ,UN Doc CCPR/C/50/D/488/1992.§ 6.10(4 April 1994)…………...12

74. Union of India & Anr. v. Azadi Bachao Andolan & Anr., AIR 2004 SC 1107................17

75. U.O.I. & Ors. v. Hindustan Development Corporation & Ors., 1994 AIR SC 988.............9

76. Union of India and Ors. v. A.N.Saxena, 1992 AIR SC 1233..............................................6

77. US vs. Miller, 425 U. S. 435, 442 (1976)..........................................................................11

78. Vandana Shiva v. Union of India.......................................................................................21

79. X & Y v. the Netherlands, Application No. 8978/80, ECHR, (ser. A ,No 091)................12



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STATEMENT OF JURISDICTION

It is humbly submitted that, the Respondent has appeared before this Hon’ble Court in response

to the notice sent to the Respondent with regard to the writ petition filed by the Petitioner under

Article 321 of the Constitution of Britussia.

1 Article 32 in The Constitution Of India, 1950-

32. Remedies for enforcement of rights conferred by this Part-

(1) The right to move the Supreme Court by appropriate proceedings for the enforcement of the rights conferred by

this Part is guaranteed.

(2) The Supreme Court shall have power to issue directions or orders or writs, including writs in the nature of habeas

corpus, mandamus, prohibition, quo warranto and certiorari, whichever may be appropriate, for the enforcement of

any of the rights conferred by this Part.

(3) Without prejudice to the powers conferred on the Supreme Court by clause ( 1 ) and ( 2 ), Parliament may by law

empower any other court to exercise within the local limits of its jurisdiction all or any of the powers exercisable by

the Supreme Court under clause ( 2 ).

(4) The right guaranteed by this article shall not be suspended except as otherwise provided for by this Constitution.



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STATEMENT OF FACTS

FACTUAL BACKGROUND:

Amersia and Britussia are two neighboring developing countries. Both the countries were,

however, plagued with the problem of high taxes, leakages in tax collections and in

generation of unaccounted monies by a few, leading to low standard of living of majority of

its citizens.

The Government of Britussia negotiated and entered into Tax Avoidance

Conventions/Agreements (popularly referred to double taxation avoidance agreements)

containing, inter alia, specific clauses for Exchange of information with many Countries

including Amersia. The Amersia- Britussia Double Taxation Avoidance Agreement (DTAA

in short) was also notified in January 2014.

The Government of Amersia, received many Dossiers containing information under the

DTAA from the Government of Britussia. It started selectively leaking information of bank

accounts held by its citizens/PAOs and their business entities in Britussia to the Press. Some

ministers in the Government of Amersia publicly announced the names of their political and

personal opponents whose names were listed in the Dossier. No investigation or other

proceedings have been initiated against such persons till date.

Television Channels in Amersia ran continuous media trials of the persons whose names

were selectively or vindictively disclosed and created negative publicity for such individuals

and their businesses.

PROCEDURURAL BACKGROUND:

The members of Amersia Association (Association in Short), an association formed for

protecting the social, cultural, financial and other interests of Citizens of Amersia and PAOs

in Britussia were alarmed by the turn of events in respect of the two non-members. With

respect to the issue the association reached the Prime Minister of Britussia,who refused to

help them for the reason that any such move will result in it losing information sources in its

mission to recover unaccounted money. Following the Amersia Association filed a Public

Interest Litigation under Article 32 of the Constitution before the Supreme Court of Britussia

seeking various reliefs.

The Union of Britusia is approaching the Supreme Court of Britussia in reply of the Public

Interest Litigation filed by the Association.



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ISSUES FOR CONSIDERATION

1. WHETHER ASSOCIATION HAS ANY LOCUS STANDI?

2. WHETHER WRIT PETITION WAS PREMATURE?

3. WHETHER THERE WAS VIOLATION OF FUNDAMENTAL RIGHTS OF ANY PERSON BY ITS

ACTION UNDER THE DTAA OR WERE SUCH VIOLATIONS IMMINENT?

4. WHETHER ARTICLE 26 OF DTAA WAS LIABLE TO BE STRUCK DOWN AS IT WAS BEYOND

THE POWER THE GOVERNMENT UNDER SECTION 90 OF THE INCOME TAX ACT OF

BRITUSSIA?

5. WHETHER TREATY MAKING AND TREATY COMPLYING POWERS OF THE EXECUTIVE CAN BE

JUDICIALLY REVIEWED?



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SUMMARY OF ARGUMENTS

FIRST ISSUE: WHETHER THE PETITIONER HAS A LOCUS STANDI?

There is no infringement of fundamental right nor were such violations imminent. Also, the

instant Public Interest Litigation has been filed with a view to abuse the process in order to

protect the subvert interest of the members of the association. Hence, the petitioner does not

have a locus standi, as, this petition is just a misuse of the provisions of a public interest

litigation which is aimed at the disruption of transfer of information, so that, the members of the

association who are suspected of violations are not brought under the purview of the

investigation when the same would be initiated.

SECOND ISSUE: WHETHER WRIT PETITION WAS PREMATURE?

The cause has not yet matured as investigation proceedings are still pending. Moreover, no final

order has yet been issued to the prejudice of the petitioner nor any other adverse action has been

taken against the members of association or the suspected individuals. Therefore, the instant writ

petition stands immature and is liable to be dismissed on this short ground.

THIRD ISSUE: WHETHER THERE WAS VIOLATION OF FUNDAMENTAL RIGHTS OF ANY PERSON BY

ITS ACTION UNDER THE DTAA OR WERE SUCH VIOLATIONS IMMINENT?

Merely the absence of the “opportunity of being heard” before sharing the information is not

violative of any fundamental rights guaranteed under the constitution. Exchange of information

is mere an administrative action and as such there no such denial of any right to the person

whose information is being shared. The “right to be heard” may be available once the

investigation is started in the state which requests such information. Moreoevr, the information

shared by the Britussia under the DTAA does not interfere with the Right to Privacy of any

individual, as, the same were shared keeping in mind the larger public interest. Hence, there was

no violation of fundamental rights of any person by the action of the respondents not such

violations were imminent.

FOURTH ISSUE: WHETHER ARTICLE 26 OF DTAA WAS LIABLE TO BE STRUCK DOWN AS IT WAS

BEYOND THE POWER THE GOVERNMENT UNDER SECTION 90 OF THE INCOME TAX ACT OF

BRITUSSIA?



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Article 26 of DTAA is in accordance with the provisions of Section 90 of the Income Tax Act,

1961 as the former is set out in accordance to the provisions of the later i.e., for the exchange of

information for the prevention of evasion or avoidance of income-tax and the terms used under

Article 26 “prevention of fraud or fiscal evasion” must be construed according to the doctrine of

“Noscitur a sociis” for the interpretation of statues. Assuming Arguendo, even in case of

inconsistency between Art. 26 of DTAA and S. 90 of IT Act, former will prevail over the latter.

Hence, Article 26 of the DTAA should not be struck down.

FIFTH ISSUE: WHETHER TREATY MAKING AND TREATY COMPLYING POWERS OF THE EXECUTIVE

CAN BE JUDICIALLY REVIEWED?

In the light of aforementioned contentions it is firmly established that, it was beyond the realms

of the judiciary to sit in judgment over the executive's decision to enter into an international

treaty. A treaty really concerns the political rather than the judicial wing of the State. Moreover,

it is not apt for this Court to go into the wisdom of the economic policies enunciated by the

Government, as, in complex economic matters every decision is necessarily empiric and Courts

should not interfere with economic policy which is the function of experts. Hence, in the instance

case, treaty making and treaty complying powers which are within exclusive domain of the

executive cannot be judicially reviewed.



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WRITTEN SUBMISSIONS

1. WHETHER THE PETITIONER HAS A LOCUS STANDI?

1.1. THAT THERE WAS NEITHER ANY INFRINGEMENT OF FUNDAMENTAL RIGHT NOR WERE SUCH

INFRINGEMENTS IMMINENT.

1.1.1. It is humbly submitted that, a person acting bona fide and having sufficient interest in

the proceedings of the Public Interest Litigation will alone have a locus standi and can

approach the court under Article 32 to wipe out the violation of Fundamental Rights

and genuine infraction of statutory provisions, but not for personal gains or private

profits or political motives or any oblique consideration. When a person acquires a

locus standi, he has to have a personal or individual right which was violated or

threatened to be violated.2 In the present case there was no violation of right to life

and personal liberty3 by the actions of the respondents. Britussia was upright in the

dealings of the treaty and was abiding by the secrecy clause of the DTAA entered into

between Bitussia and Amersia. Also the attacks that were carried out against one Mr.

Ashra Banbani4

and Mr. Saber Bechrival took place in Amersia.5

Assuming

Arguendo, even if there was any violation of right to life and personal liberty, such

violations were not committed by the actions of the respondents or within territory of

Britussia.

1.1.2. It is further submitted that, there was no violation of Fundamental Right regarding the

loss of business as no actions of the respondents could be traced to have resulted in

the loss of business of the resident of Amersia or PAOs. As mere running of negative

propaganda regarding import business of an individual cannot be traced to have

caused the loss of business, as the same was due to the violent action of certain fringe

elements of the society in Amersia.

2 Calcutta Gas Co. Ltd. V. State of West Bengal, AIR 1962 SC 1044.

3 Article 21 of the Constitution of India.

4 Compromis ¶ 11.

5 Compromis ¶ 12.




1.1.3. It is further submitted by the counsel that, Right to privacy is an integral part of right

to life guaranteed under Art. 216 of the Constitution.

7 There cannot be any such thing

as absolute or uncontrolled liberty wholly freed from restraint for that would lead to

anarchy and disorder.8 In the instant case, the alleged complaint of violation of right

to privacy does not falls within the rights protected as no right to privacy exists with

respect to information kept by bank, no right in question would be protected. Further,

arguing arguendo even if such a right is protected, the same is not interfered with, as,

interference is in accordance with law and it is to pursue a legitimate aim, also, it is

necessary in a democratic society. Hence, it is most humbly submitted for the kind

consideration of this Hon’ble court that there was no infringement of fundamental

right nor such violations are imminent.

1.2. THAT THERE IS ABUSE OF PROCESS BY THE PETITIONER

1.2.1. It is humbly submitted before the Hon’ble Court that, per curiam Sachidanand

Pandey v. State of West Bengal9, courts must restrict the free flow of case under the

attractive name of Public Interest Litigation, otherwise it will pose a threat to courts

and public inasmuch as traditional litigation will suffer and the court of law instead of

dispensing justice will have to take upon them administrative and executive function.

1.2.2. Association is acting as a tool to prevent the Union of Amersia from getting any

information from the Union of Britussia, so that, the members of the association that

are or might be suspected of tax violations by Amersian Government can further stop

the inflow of information from Britussia to Amersia, and hence to pursue the same,

they have filed a PIL questioning the validity of the provisions of DTAA between

Britussia and Amersia on grounds of violation of fundamental rights and several other

fabricated grounds. The Association by the way of the PIL is also trying to settle their

own private tussle with the politicians who disclosed the names of the persons holding

6 Article 21 of the Constituion of India – Right to Life and Personal Liberty – No one shall be deprived of

his life or persona liberty except according to the procedures established by law. 7 Kharak Singh v. State of U.P., AIR 1963 SC 1295(1300); Distt. Registrar Collector v. Canara Bank, (2005)

1 SCC 496. 8 See Infra 41.

9 (1987) 2 SCC 295: AIR 1987 SC1109: 1987 (1) Supreme 492.




foreign accounts by stopping further exchange of information to their Government of

Amersia.

1.2.3. Public interest litigation should not be "publicity interest litigation" or "private

interest litigation" or "politics interest litigation"; if not properly regulated and

abuse averted it becomes a tool in unscrupulous hands to release vendetta and

wreck vengeance, as well10

. In the instant case, petition does not seek to advance any

public right, rather, invocation of the jurisdiction of the Supreme Court as public

interest litigation is made keeping in background the political eneminty, hence, the

allegations made in the petition and in the context of the case was wholly unjustified.

Public interest litigation does not mean settling disputes between the private parties.11

Here there is much more than what meets the eye. Hence, it is humbly pleaded that,

the petitioner has no locus standi to file the petition and thus such petition filed before

court on ground of political enemity is liable to be rejected by court and is not

maintainable.12

1.2.4. It is further submitted by that, this weapon (public interest litigation) as a safeguard

must be utilised and invoked by the court with a great deal of circumspection and

caution. Where it appears that it is only a cloak to feed any ancient enmity or grudge,

this must not only be refused but also be discouraged. While it is the duty of the

Supreme Court to enforce fundamental rights, it is also a duty to ensure that this

weapon under Article 32 must not be misused or permitted to misused by creating a

bottleneck in the Superior Court preventing other genuine violation of Fundamental

Rights being considered by the court. That would be an act or a conduct that would

defeat the purpose of the preservation of the Fundamental Rights.13

1.2.5. It is therefore, the duty of the Supreme Court to discourage such petitions and to

ensure that the course of justice is not obstructed or polluted by unscrupulous

litigants by invoking extraordinary jurisdiction of the Supreme Court for personal

10

Ashok Kumar Pandey v. The State of West Bengal, AIR 2004 SC 280. 11

Ramsharan Autyanuprasi v. Union of India, 1989 Supp (1) SCC 251: AIR 1989 SC 549: JT 1988 (4) SC

577. 12

Chintamani rao v.State Of M.P, AIR 1951 SC 118. 13

Chhetriya Pardushan Mukti Sangharsh Samiti v. State of Uttar Pradesh, (1990) 4 SCC 449: AIR 1990 SC

2060: JT 1990 (3) SC 685




matters in the garb of the public interest litigation.14

Thus, a person acting for

personal gain or private profit or political motive or any oblique consideration has no

locus standi.15

1.3. CONCLUSION FOR THE FIRST ISSUE:

In the light of aforementioned contentions it is firmly established that, there is no

infringement of fundamental right nor were such violations imminent. Also, the instant Public

Interest Litigation has been filed with a view to abuse the process in order to protect the

subvert interest of the members of the association. Hence, the petitioner does not have a

locus standi, as, this petition is just a misuse of the provisions of a public interest litigation

which is aimed at the disruption of transfer of information, so that, the members of the

association who are suspected of violations are not brought under the purview of the

investigation when the same would be initiated.

-x-x-x-x-x-x-

2. WHETHER THE INSTANT WRIT PETITION IS PREMATURE?

2.1. THAT, THE CAUSE HAS NOT YET BECOME MATURE.

2.1.1. It is pertinent here to take into account the case of R. G. High Court of Madras v. R.

Gandhi & Ors.,16

where the Hon’ble Supreme Court observed that:

“Thus, it is apparent that judicial review is permissible only on

assessment of eligibility and not on suitability. It is not a case where

the writ petitioners could not wait till the maturity of the cause i.e. decision of

the collegium of this Court. They took a premature step by filing writ

petitions seeking a direction to Union of India to return the list sent by the

collegium of the Madras High Court without further waiting its consideration

by the Supreme Court collegium.”

14

Subhash Kumar v. State of Bihar, (1991) 1 SCC 598: AIR 1991 SC 420: (1991) 1 SCR 5. 15

See Supra 11. 16

LNIND 2014 SC 818 : Special Leave to Appeal (Civil) No(s).892-893/2014.




2.1.2. In the case at hand too, writ petitioners didn’t wait till the maturity of the cause i.e.,

after the investigations and other proceedings were over, but, instead of resorting to

such a procedure, the writ petitioners have adopted an unwarranted short cut. It

appears ipso facto that the association is in a hurry, and wants to cut corners by

avoiding the proper procedure of law and the same has been overlooked with a view

to stall the process of investigation.

2.1.3. It is well settled that a writ petition lies only when the right of some party has been

affected.17

In other words, a writ lies only when a cause of action has been matured.

Hence, it is humbly submitted that, in the present case, no right of the petitioner has

been affected as there is no violation of Fundamental Right by the actions of the

respondents, nor were such violations imminent. Moreover, no cause of action has yet

arisen, as, investigation proceedings are still pending, but the association for no good

and unknown reasons has rushed to this Court by way of writ petition. Thus, it is

obvious that the whole aim of this petition is to block the proceedings before any

sort of investigation could be initiated and also provide a blanket period to the

persons holding unaccounted money so that they can shift their money before the

investigation begins and before the final order may be passed in the same. These

kinds of dilatory tactics should be discouraged.

2.2. THAT, NO ORDER HAS YET BEEN ISSUED TO THE PREJUDICE OF THE PETITIONER.

2.2.1. It is submitted that, in Calcutta Gas Company Ltd. v. State of West Bengal and

Ors. 18

a Constitution Bench of the Supreme Court observed:

"The legal right that can be enforced under Article 32 must ordinarily be

the right of the petitioner himself who complains of infraction of such right and

approaches the Court for relief.”

The basis of entitlement of a writ under Article 32 of the Constitution is hence, a legal

injury resulting from the violation of a legal right of a person. The writ is

maintainable by a person who is aggrieved by an order which is to his detriment,

17

Tirlok Singh & Co. v. District Magistrate Lucknow, AIR 1976 SC 1988. 18

1962 AIR 1044, 1962 SCR Supl. (3) 1.




pecuniary or otherwise, or causes him some prejudice in one form or other. As

observed by Lord Denning, in

General of the Gambia v. N' Jie19

:

"A person can be said to be aggrieved who has a genuine grievance

because an order has been made which prejudicially affects his interest."

2.2.2. It is further submitted before this Hon’ble Court that, in case of Chanan Singh v. Co-

op. Societies, Punjab and Ors20

., the Hon’ble Apex Court observed that:

“The writ petition against a show cause notice should be dismissed as

premature as no punitive action has yet been taken and there is no present

grievance which can be ventilated in Court.”

Similarly, in the case of Mrs. Kunda S. Kadam and Ors. v. Dr. K. K. Soman and

Ors.21

, a writ petition had been filed against the recommendation of a certain

candidate by the Public Service Commission. The Supreme Court held that the writ

petition was premature as no final orders of appointment had been passed. Again, in

Dr. G. Sarana v. University of Lucknow and Ors.22

, the petitioner had approached

the High Court by filing a writ petition under Article 226 of the Constitution against

the recommendation made by the Selection Committee. It was held that the petition

against such recommendation was premature. Thus, if a writ petition is filed before

any adverse order is passed against a party or before any adverse action is taken

against a person, that writ petition should be dismissed as premature. Similar view has

been taken by the Supreme Court in plethora of cases.23

19

(1961) AC 617 (634). 20

1976 AIR SC 1821 : 1976 SCR (3) 685 : 1976 SCC (3) 36. 21

AIR 1980 SC 881 : (1980) 2 SCC 355. 22

1976 AIR SC 2428, 1977 SCR (1) 64. 23

See also, Executive Engineer, Bihar State Housing Board v. Ramesh Kumar Singh and Ors., 1996 AIR SC

691 : 1996 SCC (1) 327; Special Director and Anr. v. Mohd. Ghulam Ghouse and Anr., AIR 2004 SC 1467;

State of Haryana and Ors. v. Ch.Bhajan Lal and Ors., 1992 AIR SC 604 : 1990 SCR Supl. (3) 259; Union of

India and Ors. v. A.N.Saxena23

1992 AIR SC 1233 : 1992 SCR (2) 364; Chandra Sekhar Singh Bhoi etc. v.

The State of Orissa etc 1970 AIR SC 398 : 1970 SCR (1) 593.; Balmadies Plantations Ltd. and Anr. v. The

State of Tamil Nadu,1972 AIR SC 2240 : 1973 SCR (1) 258; Bokaro and Ramgur Ltd. v. The State of Bihar

and Anr. 1963 AIR SC 516 : 1962 SCR Supl. (3) 831; Prag Ice and Oil Mills and Anr. Union of India, 1963




2.2.3. Hence, it is humbly submitted that, the instant writ petition is clearly premature, as,

no final orders have been passed yet against the petitioner nor any other adverse

action has been taken against the members of association or the suspected

individuals. Hence, it seems that the whole plot of the petitioner was to hinder the

passing of final orders and to prevent the initiation of investigation proceedings for

the suspected charges of tax violation and thus, the petitioner is trying to stall such

proceedings by filing pre – mature writ petition. It is submitted that the whole object

of the petitioner is malafide and mischievous.

2.3. CONCLUSION FOR THE SECOND ISSUE:

In the light of aforementioned contentions it is firmly established that, the cause has not yet

matured as investigation proceedings are still pending. Moreover, no final order has yet been

issued to the prejudice of the petitioner nor any other adverse action has been taken against

the members of association or the suspected individuals. Therefore, the instant writ petition

stands immature and is liable to be dismissed on this short ground.

-x-x-x-x-x-x-

3. WHETHER THERE WAS ANY VIOLATION OF FUNDAMENTAL RIGHTS BY THE ACTIONS OF

RESPONDENTS UNDER THE DTAA?

3.1. THAT, MERELY THE ABSENCE OF THE “OPPORTUNITY OF BEING HEARD” BEFORE SHARING THE

INFORMATION IS NOT VIOLATIVE OF ANY FUNDAMENTAL RIGHTS GUARANTEED UNDER THE

CONSTITUTION.

3.1.1. It humbly submitted that, the right of audi alteram partem is a valuable right

recognized under the constitution of India, wherein it is held that, the principle of

the maxim which mandates that no one should be condemned unheard, is a part of

AIR SC 516, 1962 SCR Supl. (3) 831; Laxmi Khandsari etc. v. State of U.P. and Ors., 1981 AIR SC 873, 1981

SCR (3) 92; State of U.P. v. Sh. Brahm Datt Sharma and Anr., AIR 1987 SC 944.




the rule of natural justice.24

The audi alteram partem facet of natural justice is also a

requirement of Art. 14, for natural justice is the antithesis of arbitrariness,25

and

Art. 14 strikes at arbitrariness of State action in any form,26

as it permeate the entire

fabric of Rule of Law.27

3.1.2. It is further submitted that, principles of natural justice are required to be observed

by a court or tribunal before a decision is rendered involving civil consequences.

They may only in certain situations be read into Article 14 of the Constitution when

an order is made in violation of principles of natural justice. They cannot however

be stretched too far.28

In the case at hand, petitioner has raised the contention that, not

providing the opportunity of being heard before sharing the information is in violation

of the fundamental rights guaranteed under Art. 14 of the Constitution of Britussia.29

However, it is humbly submitted on the behalf of the respondents that, there is no

such order made or decision taken by any judicial or administrative body at the

juncture of sharing the information. Exchange of information is mere an

administrative action and as such there no such denial of any right to the person

whose information is being shared. The “right to be heard” may be available once the

investigation is started in the state which requests such information.

3.1.3. The principle of legitimate expectation is closely connected with a 'right to be

heard'.30

It was, in fact, for the purpose of restricting the right to be heard that

'legitimate expectation' was introduced into the law.31

Whether the expectation of the

claimant is reasonable or legitimate in the context is a question of fact in each case.

Whenever the question arises, it is to be determined not according to the claimant’s

perception but in the larger public interest wherein other more important

considerations may outweigh what would otherwise have been legitimate

24

M.P. Electricity Board, Jabalpur v. Harsh Wood Products, (1996) 4 SCC 522 : AIR 1996 SC 2258. 25

D.T.C. v Mazdoor Union D.T.C., A.I.R. 1991 SC 101; Basudeo Tiwary v Sido Kanhu University, (1998) 8

SCC 194: AIR 1998 SC 3261. 26

Ajay Hasia v. Khalid Mujib Sehravardi, AIR 1981 SC 487 (¶ 16, 19); Pradeep Jain v UOI, AIR 1984 SC

1420 (¶ 10, 13); Indravadan H. Shah v. State of Gujrat, AIR 1986 SC 1035; Ramana Dayaram Shetty v.

I.A.A.I., A.I.R. 1979 SC 1628 (¶ 10, 21); D.T.C. v. Mazdoor Union D.T.C., AIR 1991 SC 101. 27

Bachan Singh v. State of Punjab, AIR 1982 SC 1325. 28

Bar Council of India v. High Court of Kerala, (2004) 5 SCC 311,323 (¶ 45). 29

Compromis ¶ 14. 30

Council of Civil Service Unions & Ors. v. Minister for the Civil Service, 1985 ACC 374. 31

R in Schmidt v Secretary of State for Home Affairs, [1969] 2 Ch 149 (CA).




expectation of the claimant. A bona fide decision of public authority reached in this

manner would satisfy the requirement of non-arbitrariness and withstand judicial

scrutiny. The doctrine of legitimate expectation gets assimilated in the rule of law and

operates in our legal system in this manner and to this extent.32

3.1.4. The legitimacy of an expectation can be inferred only if it is founded on the

sanction of law or custom or an established procedure followed in regular and

natural sequence.33

It flows from an established practice.34

The doctrine does not

give scope to claim relief straight away from the administrative authorities as no

crystallized right as such is involved.35

Legitimate expectation being less than right, to

some extent, ought to be protected thought not guaranteed. 36

Protection of legitimate

expectation would not be available where an overriding public interest requires

otherwise. The protection is limited to that extent and a judicial review can be

within those limits.37

It follows that the concept of legitimate expectation is “not the

key which unlocks the treasury of natural justice and ought not unlock the gate

which shuts the court out of review on merits, particularly when the element of

speculation and uncertainty is inherent in that very concept.”38

3.1.5. The exchange of information between the contracting states is to give effect to the

DTAA between the two states which aims at the avoidance of double taxation and

prevention of fiscal evasion, which is undoubtedly in the larger public interest. Fiscal

evasion and generation of black money is a bane to the society and negation of

democracy. Thus, there is no arbitrary action, as the same is bona fide, and is taken

in larger public interest for the pursuance of a legitimate aim pro bono. However, if

in case the persons are informed and given opportunity of being heard before sharing

their information, there are possible chances of tampering of such sensitive

information by such person in order to escape themselves from any liability.

32

Food Corporation of India v. M/s Kamdhenu Cattle Feed Industries, (1993) 1 SCC 71. 33

Union of India & Ors. v. Hindustan Development Corporation & Ors., 1994 AIR SC 988. 34

Ram Pravesh Singh & Ors. v. State of Bihar & Ors., 2006 (8) SCJ 721. 35

Navyoti Co-Group Housing Society v. Union of India & Ors., AIR 1993 SC 155 36

Union of India & Ors. v. Hindustan Development Corporation & Ors., 1994 AIR SC 988. 37

Ibid. 38

Ibid.




3.1.6. Moreover, there is no such established practice or procedure which creates a locus for

the petitioner to have a legitimate expectation of the opportunity of being heard, as the

authority has not given any such opportunity to anyone in the past. Hence, the person

whose details are shared under the DTAA can’t have a legitimate expectation of being

given an opportunity to be heard before sharing the information, and as such, a

decision to share information which is taken without affording an opportunity of

being heard is not violative of the principles of natural justice and thus, Art. 14.

3.2. IN ARGUENDO, THE INFORMATION SHARED BY THE BRITUSSIA UNDER THE DTAA DOES NOT

INTERFERE WITH THE RIGHT TO PRIVACY OF ANY INDIVIDUAL.

3.2.1. Right to privacy is an integral part of right to life guaranteed under Art. 2139

of the

Constitution.40

This is a cherished constitutional value, and it is important that human

beings be allowed domains of freedom that are free of public scrutiny unless they act

in an unlawful manner. 41

However, there cannot be any such thing as absolute or

uncontrolled liberty wholly freed from restraint for that would lead to anarchy and

disorder.42

3.2.2. Determination of whether the privacy rights of an individual has been breached or not

is carried out in two stages: 1) whether the alleged complaint falls within the rights

protected, and the 2) whether there has been an interference with the right protected

and whether the same is justified.43

3.2.3. Stage One of the determination process:

Stage one has two further steps which are: A) whether the alleged right falls within

the rights protected; and B) whether there is a positive obligation on part of the state

to respect the individual right and if it has been fulfilled.

39

Article 21 of the Constitution of India – Protection of life and Personal Liberty – No person shall be

deprived of his life or personal liberty except according to procedure established by law. 40

People’s Union for Civil Liberties v. Union of India, AIR 1997 SC 568. 41

Ram Jethmalani & Ors. v. Union of India & Ors., (2011) 8 SCC 1. 42

Mr. ‘X’ v Hospital ‘Z’, AIR 1995 SC 495. 43

Ursula Kilkelly, A Guide To The Implementation of The Article 8 of The European Convention On Human

Rights (2003), p. 11-12., [hereinafter as KILKELLY].




A) The Appellant has a Burden of Proof to characterize the right it seeks to protect

and advance it before the Court.

There is a presumption that the action taken by the govt. is reasonable and in

public interest and the burden lies heavily upon the person to prove the contrary44

The party raising the claim that a right has been breached has a burden of proof to

characterize the right it seeks to protect and advance it before the court. Thus, in

this case the petitioner has a burden of proof to characterize the right it wishes to

protect and advance it before the court.

B) In Arguendo, the right in question is not protected.

In the current case, petitioner had argued that sharing of information would be a

violation of the right to privacy of individuals. A compromise definition of right to

privacy would comprise of freedom from unwarranted and unreasonable

intrusion into activities that the society recognizes as belonging to the sphere of

individual autonomy or inner circle of private life.45

The sphere of individual

autonomy or inner circle of private life has been described as the field of action

that does not touch upon the liberty of others and where one may withdraw from

others to shape one’s life according to one’s own egocentric wishes and

expectations.46

Further, respect for private life must also comprise to a certain

degree the right to establish and develop relationships with other human beings.47

Other aspects of personal interest such as family life, home and correspondence

are protected under the right to privacy.48

It has been observed that individuals

have no right to privacy in relation to records kept by banks49

and information

44

Kasturi Lal Lakshmi Reddy (M/s.) v. State of J. & K., AIR 1980 SC 1992 (¶ 14); Brij Bhushan v. State of J.

& K., AIR 1986 SC 1003. 45

S.E Wilborn, Revisiting The Public/Private Distinction: Employee Monitoring in the Workplace, 32 Georgia

Law Review, p.825-833, (1998). 46

NOWAK, UN Covenant on Civil and Political Rights: ICCPR Commentary (1993), §15 at p.294, [hereinafter

as NOWAK]. 47

Niemietz v. Germany, Application No. 13710/88, European Court of Human Rights [hereinafter ECHR], (ser.

A ,No 251B), (¶ 27-33 ( 16th December 1992). 48

The Convention For the Protection Of Human Rights and Fundamental Freedoms, Article 8, 4th November

1950(Also known as ECHR); Universal Declaration of Human Rights, (1948).Article 12, G.A. res. 217A (III),

U.N. Doc A/810 at 71;International Convenant on Civil and Political Rights,16 December 1966 Article 17,

General Assembly resolution 2200A (XXI). 49

California Bankers Association v. Shultz, 416 U.S. 21 (1974).




kept by banks doesn’t fall into the realm of activities that society recognizes as

belonging to the realm of individual autonomy nor other aspects of private life.

Thus, as no right to privacy exists with respect to information kept by bank, no

right in question would be protected.

C) In Arguendo, No positive obligation exists on the part of the state to respect the

impugned right in the light of the greater interests of the society.

States at time have a positive obligation to take steps to respect the rights of an

individual.50

In order to determine whether or not a positive obligation exists, the

state must have regard to whether a fair balance has been struck between the

general interest of the community and the interests of the individual.51

The

positive obligation does not exist when the information called for is necessary in

the greater interest of the society.52

Further States have a level of appreciation to

decide what interference would be necessary in the interest of the society and to

draw a fair balance between the relevant conflicting private and public interests.53

The information required by here is necessary for tax evasion investigation. As

reiterated earlier, tax evasion is illegal, punishable and immoral and therefore

needs to be restricted by all functions.54

Thus, there exists no positive obligation

on part of the state to respect the individual right in the greater interests of the

society.

3.2.4. Stage Two of the Determination process:

Stage two has two further steps55

which are: Has there been an interference with the

right protected? If so, A) whether it is in accordance with law56

; B) whether it is to

pursue a legitimate aim57

; and C) whether it is necessary in a democratic society.58

50

X & Y v. the Netherlands, Application No. 8978/80, ECHR, (ser. A ,No 091), (¶27-33) 51

Gaskin vs. The United Kingdom, European Application No. 10454/83, ECHR, (ser. A, No 160) , (¶42) (7th

July 1989). 52

General Comment No 16, Human Rights Committee; Peck v. United Kingdom, Application No.

44647/98ECHR, (ser. A), (¶78) (2003). 53

Klass & Others v. Germany(Application No. 5029/71), ECHR (Series A No 28),¶ 21(6th September 1978);

Cr`emieux v. France(Application No.11471/85) ECHR (Series A No 256B), ¶ 38(25th February 1993). 54

Mc. Dowell & Co. Ltd.v. Commercial Tax Officer, AIR 1886 SC 649. 55

ECHR, Article 8, [KILKELLY], See supra 43 at p 10. 56

General Comment 16, ¶4, Human Right Committee. 57

Toonen v Australia , U.N. Doc CCPR/C/50/D/488/1992.§ 6.10(4 April 1994).




A) In Arguendo, even if the right in question is protected, there is no interference

with the right.

As stated earlier, right to privacy would comprise of freedom from unwarranted

and unreasonable intrusion into activities that the society recognizes as

belonging to the sphere of individual autonomy or inner circle of private life,

while, at the same time also comprising to a certain degree the right to establish

and develop relationships with other human beings, and the right to be protected

from interference in other aspects of personal life such as family, home and

correspondence. Thus, it is pleaded that in the current case information with

regards to identity of people holding bank accounts in Britussia was requested by

Amersia under the DTAA, and such information only dealing with the identity of

people in no way would encroach upon activities belong to the sphere of

individual autonomy or interfere with a person’s right to establish and develop

relations with other human beings or interfere with his family life, home or his

correspondence.

B) Assuming without conceding, if there has been interference with the right the

interference is justified.

a. The information requested for is in accordance with law.

To ascertain whether or not the interference complained of is in accordance

with law, the interference must have a legal basis.59

Further, In order to satisfy

the legality requirement a person’s reasonable expectations as to privacy may

be a significant.60

In the case at hand, as reiterated earlier, information

requested by Amersia and shared by Britussia had a legal basis, as it is based

DTAA and is thus in accordance with law. Also, when it comes to records

held by bank an individual can have no expectation of privacy.61

Therefore, it

58

Dudgeon v. United Kingdom , Application No. 7525/76,ECHR, (Series A, No. 45)( ¶53)(23 September

1981). 59

[KILKELLY], See supra 43 at p .10. 60

P.G. & J.H. v. the United Kingdom,(Application No. 44787/98), ECHR (Series A No.2001-IX), §56 (25th

September 2001). 61

US vs. Miller, 425 U. S. 435, 442 (1976).




is submitted that, the information shared by Britussia is in accordance with

law.

b. The Information is shared to pursue a legitimate aim.

As mentioned earlier, the information shared by Britussia with Amersia under

DTAA is necessary for investigation of tax evasion. The information shared

helps to pursue a legitimate aim if it is required for the interests of the

economic well being of the country, prevention of crime, protection of morals

etc.62

Tax evasion is setback for economy, as, tax evasion creates significant

deadweight losses for the economy by distorting trade and investment, such

that these distortions reduce economic efficiency and impede growth. Further,

Tax evasion is widely recognized as public order crime. It is an illegal method

of reducing tax liability, usually by mis-stating or omitting items from the

return. Also, tax evasion is a moral turpitude which refers to conduct that is

considered contrary to community standards of justice, honesty or good moral.

Therefore, tax evasion is both outside the ‘letters’ as well as ‘spirit’ of law.

Thus, the information is shared to pursue a legitimate aim as it is required for

the interests of the economic well being of the country, prevention of crime

and protection of morals.

c. The information requested for is necessary in a democratic society

In Interpretation of the clause “necessary in a democratic society”, the

meaning of necessary in a democratic society is determined with reference to

the balance achieved between the rights through the application of the

principle of proportionality. The principle of proportionality recognizes that

human rights are not absolute and that the exercise of an individual’s rights

must always be checked by the broader public interest.63

Further, States have a

margin of appreciation to deem what interference would be necessary in the

interest of the society and to draw a fair balance between the relevant

conflicting private and public interests. As shown earlier, the information

62

ECHR, Article 8; Cr`emieux v. France(Application No.11471/85) ECHR (Series A No 256B), ¶ 35(25th

February 1993). 63

Anuj Garg v Hotel Association of India, (2008) 3 SCC 1 (¶ 36 & 51).




given here is necessary in greater public interest considering that tax evasion is

a public order crime and it has profound impact on the operations of the

society and the ability of people to function efficiently and therefore, it is

submitted the information requested here is necessary in a democratic society.

3.3. CONCLUSION FOR THE THIRD ISSUE:

In the light of aforementioned contentions it is firmly established that, merely the absence of

the “opportunity of being heard” before sharing the information is not violative of any

fundamental rights guaranteed under the constitution. Exchange of information is mere an

administrative action and as such there no such denial of any right to the person whose

information is being shared. The “right to be heard” may be available once the investigation

is started in the state which requests such information. Moreover, the information shared by

the Britussia under the DTAA does not interfere with the Right to Privacy of any individual,

as, the same were shared keeping in mind the larger public interest. Hence, there was no

violation of fundamental rights of any person by the action of the respondents not such

violations were imminent.

-x-x-x-x-x-x-

4. WHETHER ARTICLE 26 OF DTAA WAS LIABLE TO BE STRUCK DOWN AS IT WAS

BEYOND THE POWER THE GOVERNMENT UNDER SECTION 90 OF THE INCOME TAX

ACT OF BRITUSSIA?

4.1. THAT, ARTICLE 26 OF DTAA IS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 90 OF

THE INCOME TAX ACT, 1961.

4.1.1. Section 90 was brought on the statute book to enable the executive to negotiate a

Double Taxation Avoidance Agreement (hereinafter as “DTAA”) and quickly

implement it.64

Section 90 empowers the Central Government to enter into agreement

with the Government of any other country outside India for the purposes enumerated

64

See Infra 71.




in clauses (a) to (d) of sub-section (1).65

Complying with Section 90 of Income Tax

Act, 1961 the Government of Britussia has entered into a DTAA with Government of

Amersia for the purposes of avoidance of double taxation and the prevention of fiscal

evasion with respect to taxes on income and with a view to promoting economic

cooperation between the two countries.

4.1.2. It is further submitted that, Article 26 of the DTAA provides for the Exchange of

Information between the contracting states as is necessary for the purposes of carrying

out the provisions of the convention or the domestic laws of the contracting states

concerning taxes covered by the convention. It also in particular cases provides for

exchange of information for the prevention of fraud or evasion of such taxes. Thus,

Article 26 of DTAA is in accordance with the provision laid down under section 90

(1) (c)66

of the Income Tax Act, 1961, which provides for the exchange of information

for the prevention of evasion or avoidance of income-tax chargeable under this Act or

under the corresponding law in force in that country, or investigation of cases of such

evasion or avoidance.

4.1.3. The counsel humbly submits that, it is very pertinent here to make it clear that, the

terminology “…prevention of fraud or evasion of such taxes” used in Art. 26(1)67

should not be understood in a manner, as beyond the scope of Section 90 (1) (c) which

does not contain the term “fraud”. According to the much celebrated legal doctrine

for the interpretation of statues, Noscitur a sociis, the meaning of a word or

expression is to be gathered from the surrounding words, that is, from the context.

Where two or more words susceptible of analogous meaning are coupled

together noscitur a sociis, they are understood to be used in their cognate sense. They

take, as it were, their colour from each other, the meaning of the more general being

65

Ibid. 66

Section 90 (1) (c) of Income Tax Act, 1961 – Agreement with foreign countries –

For exchange of information for the prevention of evasion or avoidance of income-tax chargeable under this Act

or under the corresponding law in force in that country, or investigation of cases of such evasion or avoidance. 67

Article 26(1) of DTAA – Exchange of Information –

The competent authorities of the Contracting States shall exchange such information (including documents) as is

necessary for carrying out the provisions of the Convention or of the domestic laws of the Contracting States

concerning taxes covered by the Convention, insofar as the taxation thereunder is not contrary to the

Convention, in particular for the prevention of fraud or evasion of such taxes.




restricted to a sense analogous to that of the less general.68

In the instant case, the

terminilogy used is “…prevention of fraud or evasion of such taxes,” and the word

“fraud” is separated from the word “evasion” by the term “or”. Hence, the word

“fraud” would take its color from the term “evasion” and should not be construed

in a manner different from fraud that constitutes fiscal evasion. Meaning of the

term should be construed by the association or accordingly to the context.69

Hence,

the exchange of information for the purposes of “prevention of fraud” should not be

understood as beyond the powers of Act under section 90 (1) (c) of the Income Tax

Act, as the section does not includes the term “fraud” anywhere.

4.1.4. In John N. Gladden v. Her Majesty the Queen70

, the principle of liberal

interpretation of tax treaties was reiterated by the Federal Court, which observed:

“Contrary to an ordinary taxing statute a tax treaty or convention must be given a

liberal interpretation with a view to implementing the true intentions of the parties. A

literal or legalistic interpretation must be avoided when the basic object of the treaty

might be defeated or frustrated insofar as the particular item under consideration is

concerned.”

Hence, the counsel humbly pleads that, the Art. 26 of DTAA is fully in accordance

with the provisions of Section 90 of the Income Tax Act, 1961, and wherever

required, liberal interpretation must be awarded to the Art. 26 of DTAA, keeping in

mind its object in larger public interest.

4.2. ASSUMING ARGUENDO, EVEN IN CASE OF INCONSISTENCY BETWEEN ART. 26 OF DTAA AND S.

90 OF IT ACT, FORMER WILL PREVAIL OVER THE LATTER.

4.2.1. It is humbly submitted that, Section 90 of the Income Tax Act is specifically intended

to enable and empower the Central Government to issue a notification for

68

Rainbow Steels Ltd. v. Sales Tax Commissioner, U.P., AIR 1981 SC 2101; State of Bombay v. Hospital

Mazdoor Sabha, AIR 1960 SC 610. 69

Heinz India Private Ltd. v. Glazo Smithkline Consumer Healthcare Ltd., AIR 2008 (NOC) 1228 (Cal).,

C.B.I. A H.D., Patna v. Brij Bhusan Prasad, JT (2001) 8 SC 348 : (2001) 4 Crimes 69 (SC). 70

85 DTC 5188, at p. 5190.




implementation of the terms of a double taxation avoidance agreement.71

Section 90

was brought on the statute book to enable the executive to negotiate a DTAC and

quickly implement it.72

4.2.2. As per the decision rendered in the case of Union of India & Anr. v. Azadi Bachao

Andolan73

, if a tax liability is imposed by the Income Tax Act, the provisions of the

DTAA agreement would prevail over the provisions of the Income Tax Act and

therefore, there is no tax liability on the foreign company. Thereafter, the provisions

of such an agreement, with respect to cases to which where they apply, would operate

even if inconsistent with the provisions of the Income-tax Act.74

When the requisite

notification has been issued thereunder, the provisions of sub-section (2) of section

90 spring into operation and an assessee who is covered by the provisions of the

DTAC is entitled to seek benefits thereunder, even if the provisions of the DTAC are

inconsistent with the provisions of Income-tax Act , 1961.75

4.2.3. It was held in similar terms in a Calcutta High Court Judgement in Commissioner of

Income Tax v. Davy Ashmore India Ltd.,76

that in case of inconsistency between the

terms of the Agreement and the taxation statute, the Agreement alone would prevail.

The Calcutta High Court expressly approved the correctness of the CBDT circular

No.333 dated April 2, 1982 on the question as to what the assessing officers would

have to do when they found that the provision of the Double Taxation was not in

conformity with the Income-tax Act, 1961. The said circular provided as follows

(quoted):

“The correct legal position is that where a specific provision is made in

the Double Taxation Avoidance Agreement, that provision will prevail over the

general provisions contained in the Income-tax Act , 1961. In fact the Double

Taxation Avoidance Agreements which have been entered into by the Central

71

Union of India & Anr. v. Azadi Bachao Andolan & Anr., AIR 2004 SC 1107 : (2004) 10 SCC 1 (¶ 28 & 31). 72

Ibid. 73

Ibid. 74

Ibid. 75

Ibid. 76

Commissioner of Income Tax v. Davy Ashmore India Ltd., 1991 190 ITR 626 Cal (at p.632).




Government under section 90 of the Income-tax Act , 1961, also provide that

the laws in force in either country will continue to govern the assessment and

taxation of income in the respective country except where provisions to the

contrary have been made in the Agreement.”

The Calcutta High Court held that the circular reflected the correct legal position

inasmuch as the convention or agreement is arrived at by the two Contracting States

in deviation from the general principles of taxation applicable to the Contracting

States. Otherwise, the double taxation avoidance agreement will have no meaning at

all.

4.2.4. In Commissioner of Income Tax Officer v. R.M. Muthaiah77

the Karnataka High

Court was concerned with the DTAT between Government of India and Government

of Malaysia. The High Court summed up the situation by observing :

“The effect of an agreement entered into by virtue of section 90 of the

Act would be: (1) If no tax liability is imposed under this Act, the question of

resorting to the agreement would not arise. No provision of the agreement

can possibly fasten a tax liability where the liability is not imposed by this

Act; (ii) if a tax liability is imposed by this Act, the agreement may be

resorted to for negativing or reducing it; (iii) in case of difference between

the provisions of the Act and of the agreement, the provisions of the

agreement prevail over the provisions of this Act and can be enforced by the

appellate authorities and the court.”

4.2.5. Hence, the counsel humbly submits before the Hon’ble Court assuming

arguendo that, even if any provisions of Art. 26 of DTAA are inconsistent with

the provisions of Sec. 90 of the Income Tax Act, the provisions of former will

prevail over the latter.

4.3. CONCLUSION FOR THE FOURTH ISSUE:

In the light of aforementioned contentions it is firmly established that, Article 26 of DTAA is

in accordance with the provisions of Section 90 of the Income Tax Act, 1961 as the

77

1993 202 ITR 508 Karn.




former is set out in accordance to the provisions of the later i.e., for the exchange of

information for the prevention of evasion or avoidance of income-tax and the terms

used under Article 26 “prevention of fraud or fiscal evasion” must be construed

according to the doctrine of “Noscitur a sociis” for the interpretation of statues.

Assuming Arguendo, even in case of inconsistency between Art. 26 of DTAA and S. 90

of IT Act, former will prevail over the latter. Hence, Article 26 of the DTAA should not

be struck down.

-x-x-x-x-x-x-

5. WHETHER TREATY MAKING AND TREATY COMPLYING POWERS OF THE EXECUTIVE

CAN BE JUDICIALLY REVIEWED?

5.1. THAT, TREATY COMPLYING POWER IS WITHIN THE EXCLUSIVE DOMAIN OF EXECUTIVE.

5.1.1. It is very pertinent here to take into account the judgement of Maharashtra State

Board of Secondary and Higher Secondary Education and Anr. v. Paritosh

Bhupeshkumar Sheth and Ors78

, where it was observed by the Hon’ble Apex Court

that :

“So long as the body entrusted with the task of framing the rules or

regulations acts within the scope of the authority conferred on it, in the sense

that the rules or regulations made by it have a rational nexus with the object

and purpose of the statute, the court should not concern itself with the wisdom

or efficaciousness of such rules or regulations. It is exclusively within the

province of the legislature and its delegate to determine, as a matter of policy,

how the provisions of the statute can best be implemented and what measures,

substantive as well as procedural would have to be incorporated in the rules or

regulations for the efficacious achievement of the objects and purposes of the

Act. It is not for the Court to examine the merits or demerits of such a policy

because its scrutiny has to be limited to the question as to whether the impugned

78

1984 AIR 1543.




regulations fall within the scope of the regulation-making power conferred on

the delegate by the statute.”

5.1.2. It is humbly submitted that, the courts would not interefere with the matters of

administrative policy,79

unless the government action is arbitrary,80

discriminatory,81

or the policy adopted has no reasonable nexus with the object

which it seeks to achieve82

or is mala fide. In the case at hand, the administrative

policy is necessarily pro bono as it strikes on the issue of prevention of fiscal

evasion and black money stacked at foreign tax havens, thus, providing for larger

public interest. Moreover, the provisions of the statue having direct nexus to its

objectives.

5.1.3. On the question of courts interference in an action taken by the Government, it

was observed by the Apex Court in Kasturi Lal Lakshmi Reddy v. State of

Jammu and Kashmir & Anr.83

, as under:

“One basic principle which must guide the Court in arriving at its

determination on this question is that there is always a presumption that the

Governmental action is reasonable and in public interest and it is for the party

challenging its validity to show that it is wanting in reasonableness or is not

informed with public interest. This burden is a heavy one and it has to be

discharged to the satisfaction of the Court by proper and adequate material.

The Court cannot lightly assume that the action taken by the Government is

unreasonable or without public interest because as we said above, there are a

large number of policy considerations which must necessarily weigh with the

Government in taking action and therefore the Court would not strike down

79

Debrajan Ray v. Comptroller and Auditor General of India, AIR 1985 SC 306 (¶ 6); Maharashtra State Bd.

Of Secondary and Higher Secondary Education v. Paritosh Bhupesh Kumar Sheth, AIR 1984 SC 1543 (¶

16). 80

R. D. Shetty v. I.A.A.I., AIR 1979 SC 1628.(¶ 12, 14, 17, 21, 26), Express Newspapers Pvt. Ltd. v. UOI, AIR

1986 SC 872 (¶ 71, 200) 81

Om Prakash v. State of J. & K., AIR 1981 SC 1001. 82

Nagraj K. v. State of A. P., AIR 1985 SC 551 (¶ 28). 83

AIR 1980 SC 99.




government action as invalid on this ground, unless it is clearly satisfied that

the action is unreasonable or not in public interest.”

5.1.4. A Division Bench of the Delhi High Court in Vandana Shiva v. Union of India84

dismissed the writ petition holding that it was beyond the realms of the judiciary to sit

in judgment over the executive's decision to enter into an international treaty. A treaty

really concerns the political rather than the judicial wing of the State.85

The treaty

being entered into under the executive power of the Government, the views of all

concerned ministries are taken into consideration and different interests are identified

and reconciled before the Cabinet is requested to approve a treaty. As part of this

consideration, the administrative ministry is also required in consultation with and

approval from the Department of Legal Affairs of the Ministry of Law to identify the

need for any implementing legislation either by way of amendments to the existing

law or by the enactment of a new legislation.

5.2. THAT, COURTS ARE NOT TO INTERFERE WITH THE ECONOMIC POLICIES OF THE GOVERNMENT

WHICH IS THE FUNCTION OF EXPERTS.

5.2.1. The courts have traditionally adopted the view that, as a general rule, neither the

making of a treaty nor the performance of the obligations under the treaty, can be

reviewed by the Courts.86

Even otherwise, it is not apt for this Court to go into the

wisdom of the economic policies enunciated by the Government and law is so stated

by our Supreme Court in more than one case.87

5.2.2. It is further submitted that, in Peerless General Finance and Investment Co. Ltd.

and another v. Reserve Bank of India88

, the Apex Court observed that:

"Courts are not to interfere with economic policy which is the function of

experts. It is not the function of the Courts to sit in judgment over matters of economic

84

1995 (32) DRJ 447. 85

Maganbhai Ishwarbhai Patel v. Union of India (1970) 3 SCC 400 = AIR 1969 SC 783). 86

Rustomjee v. R., (1876). 2.Q.B.D.; JH. Rayner (Mincing Lane) Ltd. v. Department of Trade and Industry,

1990 (2) A.C. 418 (H.L.). 87

See supra 83. 88

1992 AIR SC 1033.




policy and it must necessarily be left to the ex- pert bodies. In such matters even

experts can seriously and doubtlessly differ. Courts cannot be expected to decide them

without even aid of experts.....This Court has repeatedly said that the matters of

economic policies are to be left to the Government."

5.2.3. Again, in State of M.P. & Ors. Vs. Nandlal Faiswal & Ors.89

, Supreme Court

observed that-

"We must not forget that in complex economic matters every decision is

necessarily empiric and it is based on experimentation or what one may call

trial and error method and, therefore, its validity cannot be tested on any rigid

'a priori' considerations or on the of any strait-jacket formula. The Court must,

while ad- judging the constitutional validity of an executive decision relating to

economic matters grant a certain measure of freedom or play in the joints to the

executive.”

5.2.4. In yet another case, R.K. Garg v. Union of India & Ors.90

, the Constitution Bench

of the Supreme Court pointed out that laws relating to economic activities should

be viewed with greater latitude than laws touching civil rights. It is also pointed

out that even some persons are at a disadvantage or would suffer loss on account

of the formulation and implementation of the Governmental policies, that was

not by itself sufficient ground for interference with the Government action.91

5.2.5. The counsel would further humbly like to quote the observations of Frankfurter, J. in

Morey v. Doud92

which reads as under:

"In the utilities, tax and economic regulation cases, there are good reasons for

judicial self-restraint if not judicial deference to legislative judgment. The legislature

after all has the affirmative responsibility. The Courts have only the power to destroy,

not to reconstruct. When these are added to the complexity of economic regulation,

the uncertainty, the liability to error, the bewildering conflict of the experts, and the

89

AIR 1987 AIR 251. 90

AIR 1981 SC 2138. 91

1990 (3) SCC 233; Also, India Cement Ltd. & Ors. v. Union of India & Ors., (1990) 4 SCC 356. 92

354 Us 457.




number of times the judges have been overruled by events, self-limitation can be seen

to be the path to judicial wisdom and institutional prestige and stability."

5.2.6. In the instant case, the impugned executive action, i.e., The Double Taxation

Avoidance Agreement (DTAA), necessarily involves the economic policy of

government for the avoidance of double taxation and prevention of fiscal evasion with

respect to taxes on income. It has been devised for a legitimate aim, keeping in mind

the prevailing problems of high taxes, leakages in tax collections and in generation of

unaccounted monies by a few, leading to low standard of living of majority of its

citizens93

, thus, in the larger interests of the society. Having respectfully stated earlier,

that since there is absolutely no violation of fundamental rights by the action of the

respondents, hence, even if some persons are at a disadvantage or would suffer loss on

account of the formulation and implementation of the Governmental policies under

the DTAA, that would not by itself form sufficient ground for interference with the

Government action under Article 32. Therefore, it is humbly pleaded that, a wider

interpretation must be given while ad-judging the validity of the provisions of DTAA

which is a bona fide agreement between two countries.

5.3. CONCLUSION FOR THE FIFTH ISSUE:

In the light of aforementioned contentions it is firmly established that, it was beyond the realms of

the judiciary to sit in judgment over the executive's decision to enter into an international

treaty. A treaty really concerns the political rather than the judicial wing of the State.

Moreover, it is not apt for this Court to go into the wisdom of the economic policies

enunciated by the Government, as, in complex economic matters every decision is necessarily

empiric and Courts shoud not interfere with economic policy which is the function of experts.

Hence, in the instance case, treaty making and treaty complying powers which are within

exclusive domain of the executive cannot be judicially reviewed.

93

Compromis ¶ 3.



-DRAWN AND FILED BY THE COUNSEL FOR THE RESPONDENTS- Page XIV

PRAYER

Wherefore in the light of facts stated, issues raised, arguments advanced and authorities cited,

it is most humbly prayed before this Hon’ble Supreme Court, that it may graciously be

pleased to-

1. Dismiss the instant public interest litigation.

2. Hold that there were no violations of Fundamental rights of any persons by the actions of

the Government of Britussia under the AMERSIA-BRITUSSIA DTAA.

3. Upheld the validity of Article 26 of the DTAA.

And may pass any other order in favor of the Respondent which this Court may deem fit and

proper in the circumstances of the case.

All of which is most humbly and respectfully submitted.

Sd/-

Counsels for the Respondent

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