The untimely demise of Café Coffee Day owner Mr. V.G. Siddhartha came as  a huge shock to many people – industrialists, corporate, friends and the public. The death of the coffee baron has raised many questions about the tactics of the Income Tax Department and anger against the government for their role in taking the crackdown on tax evasion and fraud, too far.

The letter left behind by Mr. Siddhartha  indicated the harassment he met at the hands of tax officials and the decisions that caused a liquidity crunch he was unable to come out of, that led to his drastic decision to end his life. He also mentioned that the pressure from an unnamed private equity partner for share buy-back was another reason for his fatal decision.

PM Modi’s administration had taken drastic steps to counter tax evasion and fraud, besides probing into bank lending practices and threatening auditors with five-year bans if they showed lapses in their work. Former government officials, industry executives, advisers and lawyers had admitted that the government agencies and tax inspectors often harassed businessmen in the name of ‘protecting revenue’.

While regulations needed to be strictly enforced, the government failed to read the difference between genuine business failures and corrupt practices.  It made business leaders too fearful to invest and inadvertently harmed the economy. Enforcement agencies often went behind loan defaulters without differentiating between genuine failure and corrupt practices. There is a very thin line between duty and harassment.

In Mr. Siddhartha’a case, the Income Tax men had been harassing him by blocking  the entrepreneur’s access to his Mindtree shares at a time when he was desperately in need of liquidity to reduce his debt. The worst assumptions of the public when they view television channels is that anyone who fails to return borrowed  money has defrauded the investors and the public. Many of these raids have been politically motivated. His death raises many questions but also points out to the manner in which tax officials and enforcement agencies work.

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