Haryana govt's non-cooperation delays multi-crore VAT scam investigation

According to an SIT report, prima facie an alleged tax evasion of over Rs 10,618 crore was detected

The Manohar Lal Khattar government in BJP-ruled Haryana, which claims to provide a clean government after ten years of mis-rule and rampant corruption by Congress-led BS Hooda government, is caught on the wrong foot for delaying the investigation in the alleged VAT scam of Rs 10,618 crore in the state.

The investigation by Enforcement Directorate has been jeopardised as the ED has filed a reply in the HC that despite repeated letters and reminders the Haryana government has not cooperated with the ED by not providing copies of the requisite documents, including copies of FIR, complaints and other documents relating to the scam. This indicates that either no FIR has been lodged anywhere in the state, regarding tax evasion or the state government is concealing the FIRs. An FIR is a pre-requisite to initiate the investigation by the ED. 

Sources close to the development informed that the Chief Secretary of Haryana DS Dhesi had circulated a letter to all excise and taxation officers in the state to file an FIR, but it remained a superficial exercise as no FIR has been registered as yet.

Even the Gurgaon MLA of ruling BJP party Umesh Aggarwal had sent a letter to the Chief Minister of Haryana, expressing concern over the cover-up of huge corruption unearthed by SIT, Lokayukta and also said that the action of vested interests was clearly marred by conflict of interest. So the MLA sought an action as per the recommendation of SIT. The whistle-blowers Raghuvir Singh and Shiv Sawhney and their advocate Pradeep Rapria through RTI reply found that PIO (Public Information Officer) cum DSP CID Crime had sent the report to the CM Office after conducting investigation on the complaint of MLA.  However, the PIO of the CM office informed the Information Commission that no record relating to the letter of the MLA was available in the registers of the CM office, which indicates that something is rotten at that high level.

Interestingly, the Special Assessment Teams, created after Lokayukta SIT Report, have raised a demand of Rs 2,604.50 crore and Special Revisional Authorities have created a demand of Rs 531 crore and the committee set up for examination of bogus refunds have identified 336 cases. This corroborates the corruption, money laundering and misappropriation, leading to huge revenue loss to exchequers. The Haryana government in its reply has admitted in the High Court that no FIR has been registered against the tax evaders and corrupt officers, which is completely in defiance to the directions of the Supreme Court and Taxation Departmental instructions, which mandates the compulsory registration of FIR for commission of any offence. 

Even if the entire scam money is recovered by the government, still the question of accountability for commission of crime of corruption, money laundering and hawala transactions remain unanswered.

A Special Investigation Team (SIT) had unearthed a multi-crore tax evasion scam in Haryana earlier this year. Headed by an IGP-rank officer Shrikant Jadhav, the SIT submitted its report to Haryana Lokayukta Justice Pritam Pal. According to the SIT report, prima facie an alleged tax evasion of over Rs 10,618 crore was detected.

The report found builders, rice industry, tobacco and cigarette industry and the officials of the excise and taxation department allegedly connived with each other to evade taxes for mutual monetary gains. Pardeep Rapria, Advocate for the Petitioners told that ‘the amount of Rs 10,000/- scam is related to only the 10 districts of Haryana, but the scam is having inter-state ramifications involving Delhi, Gujrat, Rajasthan, Punjab and other states, and the investigation by the ED and CBI may unearth the scam running into several lakhs crores. It may be important to mention here that the Gujarat police has already registered an FIR for fraudulent business transactions by the businessmen of Haryana, Delhi and Gujrat, for causing revenue loss to the government.  

Next hearing of the case in Punjab and Haryana High Court is on August 4 for arguments.

Timeline
 

- The whistle blowers have been providing information since 2007 about tax evasion, revenue theft, rampant corruption and hawala transactions actuated between business lobby and concerned officials.

- Haryana Lokayukta registered a case against the Excise and Taxation Officers in year 2011 acting upon the complaints of whistle blowers.

- As the ETOs failed to conduct the investigation, Lokayukta formed a Special Investigation Team headed by an IG rank officer of Haryana in 2014 to conduct the enquiry.

- SIT submitted its report in January 2015.

- Gurgaon MLA, Umesh Aggarwal sent a written complaint to the Chief Minister in April 2015 about connivance of builders and Excise and Taxation Officials and CM marked an enquiry to ADGP CID and Crime.

- Whistle blowers filed writ petition seeking CBI and ED Investigation in March 2016.

- High Court issued notice to the CBI, ED, Central government and Haryana government in April 2016 seeking reply as to why the Investigation of the case should be handed over to the CBI & ED

- In High Court CBI has filed the reply to the effect that the investigation will be spread in several states so it can conduct investigation if the manpower and resources are provided

- While ED has replied that the Haryana government is not cooperating with it.