What is the Magnitude of Money Laundering in VAT Scam? Submit report within two months: HC to ED

On Wednesday the J. Rajan Gupta of the Punjab & Haryana High Court directed the ED to file the report giving an estimate of the magnitude of money laundering involved in the VAT SCAM; unearthed by the SIT Lokayukta headed by IG Shrikant Jadhav. It may be recalled that while acting on several complaints of Raghbir Singh and Shiv Sahani regarding rampant corruption in the Excise and Taxation Department, the Haryana Lokayukta registered a case in 2011 and constituted an SIT headed by IG Shrikant Jadhav. The SIT team headed by an IGP-rank IPS officer and comprising senior police and Exise and Taxation department officials in March 2015 had unearthed a VAT evasion case worth Rs 10,618 crore in various districts of Haryana by contractors, builders cigarette dealers, rice exporters and others. The SIT had observed that due to non-cooperation of certain officers of the department, the scam, which could be even bigger, could not be properly probed.  However, the Haryana Govt. by filing an action taken report dated: 11.08.2017 had raised questions over the investigation team’s understanding of the issue and told the Punjab and Haryana High Court that it “strongly denies the assertion of SIT”. It further said the figure was exaggerated by the latter just “to make its  report sensational.” Challenging the government’s response, during the hearing,  Advocate Pardeep Rapria, counsel for the Petitioner seeking CBI & ED investigation submitted that through the action taken report Govt. had taken 'U Turn', because in the written statement filed before the High Court the Govt. had maintained that after Special Assessment Team (SAT) formed after Lokayukta Report had created the demand of Rs. 2604.50 Crore and Special Provisional Authority (SRT) had created the demand of Rs. 531.58 Crores.  Action Taken Report up to 30.04.2016 is:

In the course of hearing the Enforcement Directorate (ED) also filed concise reply through its Assistant Director, Satyender Dhull; wherein it averred that :"As per the information received from the State of Haryana 57 FIRs have been registered by State Police and ECIRs had been opened and investigation is in progress" "Neither any FIR is registered nor any criminal complaint is pending before the court of law in case of Rice Exporters/Rice Shellers and ED can initiate investigation if there is an FIR registered by police or a criminal complaint is pending before competent court of law in relation to the Scheduled Offences mentioned in the Prevention of Money Laundering Act." ED Reply reads:

Keeping in view the reply the High Court directed the ED to file the report giving an estimate of the magnitude of money laundering involved in the VAT SCAM, after scrutinizing the FIRs provided by the Haryana Govt. High Court observed that after considering the reply of the ED it will ascertain the allegation of the Advocate Pardeep Rapria that the big fishes had been protected by registering FIRs against the small traders. It may be recalled that the Counsel for Petitioner by filing an Application had submitted that "on the basis of the cases (registered) the baffling pattern emerges that the criminal action has been initiated only against the small traders, whereas the big fishes against which the SIT, Lokayukta had categorically recommended CBI investigation have been cleverly protected. It appears that the registration of selective FIR is just a camouflage to protect the big fishes."

The High Court posted the matter for hearing on 08.12.2017 for considering ED Report