DTAT with Germany is sloppy: SC

Supreme Court cautioned the government not to enter into an agreement which would undermine Constitution.

Holding that the Double Taxation Avoidance Treaty with Germany has been drafted in a “sloppy” manner,the Supreme Court today cautioned the government not to enter into an agreement which would undermine Constitution.

“The fact that such treaties are drafted by diplomats,and not lawyers,leading to sloppiness in drafting also implies that care has to be taken to not to render any word, phrase,or sentence redundant,” a bench of justices B Sudershan Reddy and S S Nijjar said.

“The government cannot bind India in a manner that derogates from Constitutional provisions,values and imperatives,” the court said adding “we agree that the language (DTAT with Germany)could have been tighter and may be deemed to be sloppy.”

The bench said the treaty with Germany does not prevent the Centre from disclosing the names of the persons having bank accounts in Liechtenstein bank.

“We have perused the said agreement with Germany. We are convinced that the said agreement,by itself,does not proscribe the disclosure of the relevant documents and details of the same,including the names of various bank account holders in Liechtenstein,” the court said.