Sustained perusal by the state revenue department of the alleged fraud detected by the Comptroller and Auditor General (CAG) of Orissa in the sale of the fertiliser complex along with 1000 acres of land at Paradeep by OSWAL group to Indian Farmers' Fertiliser Co-operative Ltd. (Iffco) in 2005 has paid rich dividend.
The state revenue department has been able to collect Rs 256.82 crore in the sale deal while the state government has mopped up Rs 294.17crore in the process including Rs 37.35 crore collected as sales tax.
In an out of court settlement, Iffco, which purchased the di-ammonium phosphate (DAP) plant of Oswal Chemicals and Fertilizers Ltd at Paradeep deposited Rs 168.02 crore towards the payment of balance stamp duty and registration fee, settling the matter for ever.
The sale of DAP plant of Oswal Chemicals and Fertilizers Ltd. at Paradeep to Indian Farmers' Fertiliser Co-operative Ltd. (Iffco) for Rs 2,162.89 crore had cast a shadow on the role of both the companies in the deal.
Suppression of facts by the two companies and the ‘dubious’ role of the Orissa government, which cost the state exchequer about Rs 280.80 crore, came to light after the fraud was detected by the Comptroller and Auditor General (CAG) of Orissa in 2007.
The CAG report stated that though the deal attracted stamp duty and registration fee totaling Rs 281.17 crore, the state government levied a paltry Rs 37.52 lakh for the purpose. The state government, on the other hand, claimed that the short levy was due to non-availability of complete information from the two companies involved.
The Oswal Chemicals and Fertilisers Ltd (OCFL) entered into an agreement with Iffco in 2005 for sale of its DAP plant at Paradip for a consideration money of Rs 2,162.89 crore. So a tripartite agreement was signed between the state owned Industrial Infrastructure Development Corporation (IDCO), OCFL and Iffco in June 26, 2006.
Subsequently, IDCO permitted transfer of leasehold right from OCFL to Iffco for the 1,000 acres of land at Paradip on payment of Rs 3 crore as registration fee, as per the provisions of the agreement. Sources said, those companies showed the total valuations, but didn’t pay stamp duty and registration fee correctly, which was brought out by the CAG report.
Following this, the state government started its enquiry as to how this deal escaped the scrutiny of the government. It was found that instead of sale deed, these two companies had produced tripartite agreement signed between IDCO, OCFL and Iffco for the purpose of taxation, for which the exact amount could not be levied.
Meanwhile, the state government rejected a prayer received from these companies in 2005-06 for waiver of stamp duty for the deal in 2007. It forced these companies to deposit Rs 88.8 crore in August 2007 towards stamp duty and registration fee, sources added.
However, the state government later found this amount to be much lower than the actual dues towards stamp duty and registration fees and asked the parties involved to pay up more. Against this move, the companies had gone on appeal to the Board of Revenue. The state government continued to put pressure on these companies, resulting in payment of Rs 37.35 crore as sales tax for the movable property.
While the matter was pending with the Board of Revenue, they negotiated for an out of court settlement with the government. Accordingly, the case filed in the Board of Revenue was withdrawn and Iffco paid Rs 168.02 crore towards the balance stamp duty and registration fee.
