Congress's Tax Trials and the Myth of Fair Elections

The clichéd phrase asserted by the Prime Minister of India on every foreign visit, amidst international criticism against his government for alleged human rights abuses, religious intolerance and democratic backsliding in the country is that India is “the mother of democracy”.

India is the largest democracy. Indeed the proudest achievement of our nation in its 75 years of existence as a modern state is its tryst with democracy.

But democracy is a form of government that is characterised by the rule of the people. And one cannot have meaningful political participation and competition without the relatively free ability to organise and offer policy proposals, criticise leaders and demonstrate in public without official intimidation. The presence of two or more political parties is a robust manifestation of this requirement. Elections become meaningful when there is genuine possibility of change in actual political power.

But, repeated elections alone do not make a democracy. Elections without effective or genuine political competition would only make the process a farce.

Elections are not mere casting of votes and festivities, they focus on offices that are seats of state power. When millions flock to cast their ballots and to have their voices heard, in essence, they are trying to occupy those authoritative seats to realise the policies they desire should govern them.

Opposition parties

In any democratic society, the presence of an opposition party is vital for the smooth functioning of free and fair elections. The role of an opposition party goes beyond mere political competition; it is an integral part of upholding democratic values and ensuring that the ruling party remains accountable to the people it serves. It is through these diverse political parties and interest groups, that a person acquires diversity of perspectives. Each political party provides for a lens to filter the information through ideologies, forge different personal identities and acquire diverse mental maps essential to cater to the plural demands inherent within any society. 

Apart from political competition, an opposition party provides an alternative voice and perspective to the ruling party.

Furthermore, an opposition party acts as a check on the ruling party’s power. Without an effective opposition, the ruling party might be tempted to abuse its authority or make decisions without proper scrutiny. The presence of a strong opposition party helps prevent the concentration of power in the hands of a few.

So, when we are exercising our right to vote, we are not simply checking a box or following a script. We are expressing an opinion that is shaped by a complex set of factors.

Hounding the opposition

When the principal opposition party’s accounts were frozen just two weeks before the announcement of the national elections, and fresh notices are continually being sent when the elections are underway, do you think democracy is alive in our country?

India, a vibrant democracy known for its free and fair elections, is currently facing a significant challenge in maintaining the integrity of its political system. India’s opposition has been struggling as it is being targeted by the Enforcement Directorate, Central Bureau of Investigation, Income Tax authorities and other federal agencies at the behest of the ruling Bharatiya Janata Party (BJP). Multiple opposition leaders across wide spectrum of political ideologies – Dravida Munnetra Kazhagam, Rashtriya Janata Dal, Nationalist Congress Party, Samajwadi Party, Shiv Sena (Uddhav Bal Thackeray), Congress, Aam Aadmi Party, Bharat Rashtra Samithi, and Jharkhand Mukti Morcha – opposed to the BJP, are facing the wrath of the investigative agencies unleashed to cower them, as if all sins can be only found in the ranks of the opposition, whereas the ruling party is clean.

The pinnacle of the abuse manifests in the arrest of chief minister of Delhi, Arvind Kejriwal and Jharkhand chief minister, Hemant Soren, right before the elections.

Congress, too, finds itself burdened with tax demands that have raised concerns about the fairness of the upcoming elections. Timing of the tax demand was designed to cripple the finances of the party right before elections, thereby eliminating even the semblance of competition in these elections. These demands, which some perceive as politically motivated, have raised concerns about the party’s ability to contest the upcoming elections on an equal footing with its rival the BJP.

The tax matters which have been used as a pretext to hound the principal opposition party right before the elections have been sub judice for some time. All this while, the authorities never bothered to initiate any action, because the matters are still pending before different courts, even though there was no stay operating in favour of the Congress. In the month of February, two weeks before the elections were to be notified and model code of conduct came into effect, after a delay of one year from the date of appeal filed in 2023, Income Tax authorities sent directives to the banks holding Congress accounts, to create lien for a sum of Rs 105 crores. When the party approached the Income Tax Appellate Tribunal seeking a stay against this directive on February 16, 2024, where the appeal is still pending, the tax department undertook not to initiate any coercive action till the stay application is decided. Before February 21, the date fixed for hearing before the tribunal, the tax authorities went to the banks and got issued demand drafts totalling Rs 65 crores, in utter disregard of their own undertaking before the tribunal. Later, when Congress could not obtain any relief from the Delhi high court, the department withdrew the total demand of Rs 135 crores, including penalties. This was hastily done, without providing the party time to exhaust its remedy before the Supreme Court.

Next came a demand for a sum of Rs 53.9 crores for assessment year 1994-1995 after a delay of years, in a matter still pending adjudication before the apex court. Then an astronomical figure of Rs 3567 crores was raised on  March 29, 2024, which are ‘belated’ reassessment orders, as per numerous Supreme Court precedents. Break-up of the same is as follows:

The issue at hand is not the tax demands themselves, but rather the timing and nature of these demands raising doubts about the fairness of the electoral process. At this juncture, the government’s actions against the Congress would only seem politically motivated and intended to weaken the party’s chances in the elections.

The financial incapacitation of Congress will eventually lead to a lack of diversity in our political landscape. As we approach election season, it’s important to remember that finances play a vital role in the success of any political party. Without proper funding, Congress will struggle to get its message out to potential voters and may also struggle to compete with the exorbitantly well-funded BJP.

Vital to any election campaign is advertising. Parties need to be able to get their message out to potential voters, and this often requires significant investment. This can include television and radio ads, social media campaigns, and other forms of advertising. Organising rallies, mobilising people, or funding candidates all require finances. In addition to these, parties also need to be able to pay for staff and other expenses related to running a campaign. This can include everything from office space to transportation to food and lodging for staff and volunteers.

Maintaining the integrity of the electoral process is of utmost importance in a democracy. Any attempt to undermine this process, whether through politically motivated tax demands or other means, threatens the very foundation of democracy.

In order to address these concerns, it is essential that the institutions that enforce rule of law, walk the talk and take immediate action. Collectively they should ensure that the tax demands against the Congress are fair and transparent, and not driven by political considerations. 

Additionally, it is crucial for independent institutions, such as the Election Commission of India, to play an active role in ensuring the fairness of the electoral process. They should closely monitor the situation and take necessary action to prevent any undue interference in the elections. This includes investigating any allegations of political bias or manipulation and holding those responsible accountable.

Vivek K. Tankha is a Congress Rajya Sabha MP. He is a Senior Advocate, a former Additional Solicitor General of India, and a former Advocate General of Madhya Pradesh.