CBI seeks office infrastructure and manpower from Haryana Govt. for investigating the VAT Scam and E.D. seeks copies of FIR

CHANDIGARH: 28^th May, 2016. CBI has filed reply in the HC; in response to a petition seeking CBI or ED Investigation into the huge VAT scam running into several thousand crores, allegedly committed by Businessmen-Politician-Bureaucratic nexus. Mr. Pardeep Rapria, Advocate for the Petitioner apprised the correspondent that, by and large, in its reply dated 23.05.2016 the CBI has not objected to the submissions of the petitioner, but has expressed concern that ‘the issues related to evasion/refund of Sales Tax NAT, money laundering etc. are also spread over different states i.e Punjab, Rajasthan, Delhi, UP, MP, Maharashtra etc as per the findings of SIT, which requires large number of resources.’ Therefore, the CBI has  ‘prayed that in case the investigation is ordered to be conducted by CBI then this Hon'ble Court may be pleased to direct the State Govt. to provide all logistic support in form of manpower, offices, I vehicles ahd equipments etc. for effective investigation by CBI.’ 

ORIGINAL REPLY OF CBI

Mr. Rapria also told that the reply of Directorate of Enforcement, Income Tax Department and Haryana Govt., in the matter coming-up for hearing on 30^th May, 2016, is still awaited. However, as per the sources, the Directorate of Enforcement 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 dated 10^th May, 2016 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.

ORIGINAL LETTER OF THE DIRECTORATE OF ENFORCEMENT

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. Raghbir Singh and Sawhney the Petitioners in the High Court have 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.

In view of the latest development and the stand of the CBI and Directorate of Enforcement the matter is most likely to be handed-over to the Central Investigation Agency by the bench of Justice Paramjeet Singh Dhaliwal of the High Court on the coming date 30.05.2016.