Hyderabad High Court spots tax scam, calls CID inquiry

Hyderabad: The Hyderabad High Court has directed the Crime Investigation Department to conduct an inquiry into alleged advance issue of way bills to traders by the commercial tax department and submit a report to the court within a month. A division bench comprising Justice C.V. Nagarjuna Reddy and Justice T. Amarnath Goud was dealing with a petition by Akash Foods challenging the action of the commercial tax department in collecting post-dated cheques from them for Rs 32,87,361 without any assessment order and determination of liability.

During the course of hearing of the petition the bench noticed that the commercial tax officials had been issuing advance way bills to traders for inter-state transport. During an inquiry by the Maharashtra government with regard to advance way bills, it was revealed that the dealers’ claim that they were located at Nanded were bogus. The bench noticed that the bank statement of various dealers claimed to be located in Delhi revealed that they were carrying on banking operations from Hyderabad. The KYC (Know Your Client) norms prescribed by the Reserve Bank of India indicated that the dealer was from Mumbai.

Finding that these dealers were evading tax, the bench observed: “We  are surprised that so far  neither have criminal cases been registered nor the matter entrusted to any agency to investigate into the alleged fraudulent transactions so as to bring the culprits to book.” The bench said “Deliberate evasion of tax by adopting devious methods is a heinous crime and such acts shall be put down with a heavy hand. The state cannot soft-peddle such grave acts and remain complacent merely by collecting differential tax and penalties.”