The Orissa government lost of Rs 1241.86 crore revenue during 2007-08, due to under-assessment of tax, short levy, acceptance of defective declaration, irregular exemption, non-levy of penalty and failure of the assessing authorities to detect concealment of the turnover by assesses.
This pertained to the irregularities in the collection of sales tax/value added tax, entry tax, motor vehicle tax, land revenue, stamp duty, registration fees, state excise, forest receipts and mining receipts among others.
While the concerned departments accepted under assessment and other deficiencies of Rs 232.5 crore involving 1,56,075 cases in 2007-08 and earlier, only Rs 20.54 crore involving 20,148 cases were recovered.
These irregularities have been detected by the Comptroller and Auditor General of India (CAG)’s audit report of the revenue receipts for 2007-08.
Though the Public Accounts Committee (PAC), had submitted 48 reports containing 385 recommendations to the state assembly between 1991 February to March 2007, action taken notes for 346 cases were submitted by various departments to the Orissa Legislative Assembly Secretariat up to September 2008.
Similarly, check of records in the commercial tax offices during 2007-08 revealed under-assessment of tax, irregular grant of exemption and non levy/short levy of surcharge, interest, penalty, wrong computation of taxable turnover and other deficiencies of Rs 272.29 crore in 189 cases.
The report says that the department accepted underassessment and other deficiencies of Rs 10.59 crore in 89 cases which were pointed out by audit in earlier years. However, the department was able to recover Rs 1.19 crore in 14 cases. Besides, the review on the concessions and exemption on inter-state sales and branch transfers revealed a number of system and compliance deficiencies involving Rs 32.73 crore. This included under-assessment of tax amounting to Rs 6.11 crore due to acceptance of defective declaration, short levy of taxes amounting to Rs 8.23 crore in 26 cases. The irregularities in this case also included under assessment of Rs 18.4 crore tax due to the irregular exemption on the basis of the invalid or duplicate declaration forms and transfer of goods to places not included in the registration certificate of the dealer.
In another case, exemption of sales tax of Rs 7.06 crore was allowed to three industrial units under the sales tax incentive scheme on inadmissible items and in excess of the admissible limit.
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The CAG report pointed out that a manufacturer of polyester staple fibre and yarn did not disclose purchase of diesel worth Rs 12.67 crore leading to the under assessment of tax amounting to Rs 2.04 crore. Besides, penalty of Rs 1.12 crore was not levied for excess claim of deduction, non-payment of tax on purchases and inadmissible purchases at a concessional rate of interest.
The report stated that payment of tax by the assesses at lower rates was accepted by the assessing authorities in assessment causing short levy of entry tax of Rs 2.29 crore including penalty. That apart, failure of the assessing authorities to detect concealment of turnover by assesses led to a non-levy of tax of Rs 1.36 crore including penalty, the audit report said it added.