VAT scam: ED seeks details of dealers, bogus firms

CHANDIGARH: The Enforcement Directorate is preparing to proceed against dealers involved in VAT scam in the state under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, and has sought copies of the FIRs lodged by the Excise and Taxation Department against persons identified to be indulging in tax evasions like fraudulent tax refunds.

Sushil Manav

Tribune News Service

Chandigarh, May 26

The Enforcement Directorate is preparing to proceed against dealers involved in VAT scam in the state under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, and has sought copies of the FIRs lodged by the Excise and Taxation Department against persons identified to be indulging in tax evasions like fraudulent tax refunds.

In a letter to the Excise and Taxation Commissioner, Haryana, the Chandigarh Zonal Office of the Enforcement Directorate stated: “It was advised that whenever a person is identified to be indulging in tax evasion like fraudulent claims of the input tax credit, raising bogus bills or floating a bogus firm, should be immediately proceeded against by lodging an FIR in addition to the action initiated under the Haryana Value Added Tax, 2003.”

In the letter, the ED has sought the copies of the FIRs immediately under Section 54 of the Prevention of Money Laundering Act with a view to ascertain proceeds of the crime involved therein.

The ED has also asked the Excise and Taxation Department to provide information, even if no FIR has been lodged. The department, however, has yet not provided any details of the FIRs, if any, to the ED.

When contacted by The Tribune, Shyamal Mishra, Commissioner, Excise and Taxation Department, said the information was being collected from all districts.

“Perhaps, a week more will be required to gather information,” Mishra added.

Sources revealed that the Excise and Taxation Department had not lodged any FIR in connection with a plethora of frauds committed with it by siphoning of government funds by way of fraudulent VAT refund claims by parties in connivance with officials of the department.

Inquires from Sirsa, where the maximum number of bogus claims of VAT refund have come to the fore during a probe by the SIT appointed by the Lokayukta, confirmed that not a single FIR has been lodged in that district.

Over 30 firms from Sirsa had not only duped the state government of hundreds of crores by fraudulent VAT refunds in the state, but also in Chandigarh and Gujarat.

Shiv Sawhney, a whistleblower who had exposed the VAT refund scam, alleged that not a single case had been registered anywhere in the state by the Excise and Taxation Department since its own officials colluded in the fraud.

Sawhney has now provided copies of the FIRs registered against dealers from Sirsa and other parts of Haryana by the Gujarat Police and the CBI’s Chandigarh office to the Enforcement Directorate.