EXTORTIONISTS

        Absolute power corrupts absolutely. Our Association had vehemently protested when wide powers were proposed to be given to the bureaucracy under the MVAT Act. But the Government turned deaf ear to our protest. The inevitable result is that the officers of the Department have started showing their true colours and are extorting money from the dealers. Here is the case where the extortionist is none other than
the Deputy Commissioner of Sales Tax, namely Mr. Kale, of Nashik Division.

        The dealer involved is the Public Limited Company. Every year they give around sixty crores revenue to the State. Their assessment orders always resulted in refunds and hardly they have paid any interest to the State. In recent past they sold goods to a dealer who has permanent places of business in Maharashtra as well as in West Bengal and holds valid registrations for both the places. The company had effected some interState sales to such dealer against Form C. The West Bengal authorities informed the Department here that the forms given by the dealer to the company were not issued by them. As usual, visit was paid to the company and documents were seized. The company submitted all the necessary documents to the Department relating to the interState sales including the forms which bear the seal of the West Bengal State and the name and designation of the issuing authority. But, they expressed their inability to opine on the issuance of such forms. It is but natural. How do they know whether the forms were issued by the appropriate authority or not and there is no question of doubting the same when the forms bear seal and signature of the issuing authority.

        The rule of the natural justice demands that such cases are thoroughly investigated. The statements/documents obtained from the buyer/West Bengal Department be shown to the company officials and their explanation on the same is obtained. Thereafter, if the authorities conclude that there was a collusion between the buyer and the seller in procuring such unauthorized declarations then they should immediately assess such turnover, raise the demand and take necessary action authorized by law.

        But, the gentleman, his highness Mr. Kale does not believe in such lawful procedures. He ordered the complaint to be filed with the police under section 420 of the Indian Penal Code. The complaint is against the Dy. General Manager and another Manager of the company. Moreover an interview was also given to the local press that the fraud has been committed. The company is giving sixty crores revenue to the State and the tax involved in such transactions is only rupees twenty four lakhs, is of no relevance to him. The police have commenced their extortion and the poor officials are now on the job of getting anticipatory bail.

        We suspect the bona fides of the Department in this entire episode. Hon. High Court at Bombay in the Public Interest Litigation (W.P. No.1136 of 1997) filed by the Bombay Bullion Association has expressed anguish over such high handedness and has directed that no recovery should be made unless the assessment or reassessment is made. We are aware that even the Deputy Commissioners do not read the judgments. But at least the Circular issued by the Commissioner (Circular No.23T of 2003 dt. 22-10-2003 should have been read. He could have passed the statutory orders rejecting such forms and recover the taxes. But he did not want to follow that legal course nor he wanted to follow the circular of his own Commissioner. Instead of using his own machinery he approached the police. We therefore suspect the bona fides. We appeal to the Commissioner to enquire into the matter. The Deputy Commissioner should answer, firstly, why he did not follow the circular and secondly what proceedings were taken up against the person who issued the forms.

        We would also wish to advise the dealers to be courageous in such matters. It is easy to squeeze the corporates, the officials being white collared. The bench of the Supreme Court comprising Hon'ble Justice H.K. Seema and P.K. Balasubramaniyan has recently observed that the police is bound to register an FIR on the basis of the allegations in a complaint or otherwise it would result into ‘grave miscarriage of justice’. File FIR against any such illegal action initiated by the so called ‘public servants’. Let the Courts now decide to what extent they should get protection of being public servants.