In the lead-up to the upcoming Assembly elections in five states, the Income Tax Department has significantly increased its efforts to curb the flow of unexplained cash. On November 15, CBDT chairman Nitin Gupta disclosed that the department's seizures of unexplained cash surpass those from previous elections in these states.
Mr. Gupta emphasized the collaborative approach taken by enforcement agencies, including the Income Tax Department, in enhancing surveillance and gathering information about unexplained cash and jewelry through toll-free numbers specifically created for this purpose. This pre-election monitoring, he noted, is meticulously coordinated at the level of the Election Commission and state election authorities.
Highlighting specific examples, it was revealed that in Rajasthan, there has been a three-fold increase in the total seizure of illegal cash, liquor, drugs, gold, and silver compared to previous years. The seizures, which amounted to ₹322 crore in 2021 and ₹347 crore in 2022, surged to an unprecedented ₹1,021 crore by October 2023.
The states of Chhattisgarh, Telangana, Rajasthan, Madhya Pradesh, and Mizoram are set to go to the polls in November. This surge in enforcement activity aligns with the apex authority in indirect tax, the Central Board of Indirect Taxes and Customs (CBIC), issuing a Standard Operating Procedure (SoP) in July. The SoP instructed tax officers to implement directions from the Election Commission regarding the use of freebies, illicit cash, liquor, and drugs to influence voters. Moreover, tax officers were directed to monitor the distribution of coupon-based or free fuel and cash aimed at luring prospective voters.
In an effort to bolster these measures, GST and Customs officials were instructed to establish "flying squads and static surveillance teams" for effective road and transit checks of vehicles. Additionally, they were tasked with verifying warehouses to curb illegal and prohibited activities in the run-up to the elections.
The intensified crackdown on unexplained cash and the comprehensive approach taken by the Income Tax Department and other enforcement agencies underscore the commitment to ensuring fair and transparent elections in these states. As the election season unfolds, the impact of these measures on curbing illicit activities and influencing voters will be closely monitored.