Ahmedabad, 9 July 2012

Gujarat BJP today requested Chief Election Commissioner of India to see that local traders and businessmen are not unnecessarily harassed during election time.

During the meeting with Chief Election Commissioner in Ahmedabad’s Circuit house today, BJP leaders Kaushik Patel, Parindu Bhagat(Kakuji) and Shankar Chaudhary made this request.

“Gujarat is doing top in industry and trade. Even when there’s no election season, lots of transactions take place in cash in the state.Considering this fact, the election commission should see that there’s no unnecessary harassment to businessmen and traders during the election time,” BJP MLA and state General Secretary Shankar Chaudhary said when asked about details of Gujarat BJP’s representation before the Election Commission.

“We have also requested that election dates should be fixed in a manner that they don’t collide with natural festivals like Navratri or Diwali, as it could result into lower turnout,” Caudhary added.

“Election is festival of democracy. If it is taken as a festival, it’s good for people. If there’s an atmosphere of pressure and force, it would have adverse effect over involvement of people,” Chaudhary further said.

“CEC and his team has most of the points in our representation positively,” he said.

Background:

In recently concluded assembly polls in north India, the Election Commission has issued guidelines that any person carrying over Rs 2.5 lakh in cash would have to support the same with evidences during checking, otherwise it would be confiscated.

The Income Tax Department was entrusted with the job of monitoring the use of undisclosed money in elections, had categorically stated that unaccounted money will be seized if it is not explained with documentary proof by the cash holder and action will be taken under Income Tax laws.

An intensive exercise by surveillance teams comprising police officials to recover unaccounted cash since the Code of Conduct had came into force and it had created panic among various industry verticals, where heavy cash transactions take place.

Confiscation of huge sums of “unaccounted” cash by surveillance teams to curb the “misuse of money power” in the upcoming Assembly elections had evoked a sharp reaction from businessmen, who complained that such “sheer harassment” was hurting business transactions.

On the directions of the Election Commission of India, state Static Surveillance teams had seized crores of rupees.

While EC pointed out that it was very difficult to carry documentary proof of every cash transaction, Real estate developers, who faced the maximum brunt of the cash seizures, said property buyers are suspending their decisions to buy property till the state elections are over.

Take an example of Punjab.Led by the Additional Director of Income Tax, over 60 Income Tax officials, including Assistant Directors, ITOs and Inspectors, had been deployed on duty to keep a check on misuse of money in elections. A control room had also been set up in Ludhiana for receiving complaints or information regarding movement of cash or other items intended to be used as bribes for votes.

In January ths year, fearing that banks may be “misused” to bribe voters with cash during the forthcoming polls in five states, the Election Commission had asked the RBI to ensure that banking channels are not exploited for such purposes.

The EC had written to the Reserve Bank of India in the backdrop of an incident where the Income Tax department seized, from two vans, cash of about Rs. 12.38 crore reportedly belonging to ICICI Bank after it was intercepted at Delhi’s border with Ghaziabad (Uttar Pradesh).

During the same interception on January 9, another Rs. 60 lakh cash claiming to be deposited in HDFC Bank, was seized by the tax department.

The amounts, suspected not to be conforming to cash movement rules stipulated by RBI, are now under the scrutiny of the I-T department on the directions of the EC.

“…request you (RBI) to conduct a thorough inquiry of the case (seizure at Ghaziabad) and to ensure that the banking channel is not misused by the unscrupulous persons to carry cash to the constituency during election process, for the purpose of bribing the electors,” a letter received by the RBI Deputy Governor in Mumbai from the poll body said.

The EC, in its January 12 letter, had also reminded the RBI that it has earlier written to the banking regulator after it received similar complaints during the Assembly polls in Tamil Nadu. It also cited the instance that occurred at Sahibabad in Ghaziabad on January 9 when the cash, being ferried by two private firms Brinks Arya and SIPL in their vans, was intercepted by surveillance teams and later seized by the I-T department.

Mansa by-election experience

Take an example of Mansa by-election. the Election Commission had announced that cash more than Rs 2.5 lakh found in any vehicle would be put under scrutiny of the Income Tax department. If it is less than Rs 2.50 lakh, the team would seek supporting documents.

The Income Tax department had appointed a nodal officer and Indian Revenue Service(IRS) officer BB Garg was appointed as Expenditure Observer. A local Income Tax officer was appointed as Assistant Expenditure Observer. 30 static surveillance teams were formed in Gandhinagar and Mehsana. Five teams were deployed in Mansa, while 18 in Gandhinagar district and 12 in Mehsana district.

In one case, Vijapur based cotton mill owner Girishbhai Patel was held by checking team with Rs 13 lakh cash in his car. Income Tax officers were also called. Girishbhai was allowed to go only when he produced all the documents of bank.

In another example, Mehsana’s factory owner Prahlad Patel was stopped by a checking team and asked to produced supporting documents to prove that Rs 3.67 lakh cash with him was white. Prahladbhai maintained that the cash was for payment to employees of his factory.

Various surveillance teams had seized Rs 15.94 lakh cash from cars in Mansa by-election season.

What about repayment?

There are examples that cash worth lakhs of rupees was seized by Income Tax department from traders during the election. After ADI(investigation) the transaction was found genuine(withdrawal from bank), but neither Election Commission nor Income Tax department returned the money back.