The gutkha scam in Tamil Nadu

I-T Dept did hand over gutkha scam report to Chief Secretary

The report contained details of alleged payoffs by a gutkha manufacturer to a minister, two top police officers.  

While the State government has informed the Madras High Court (Madurai Bench) that it did not receive any letter from the Income Tax Department on the multi-crore gutkha scandal in July last year, documents perused by The Hindu reveal that a detailed report on the alleged scam was actually submitted to the Chief Secretary and the Director-General of Police in August, 2016.

It is reliably learnt that the Principal Director of Income Tax (Investigation) B.R. Balakrishnan had on August 12, 2016 met then Chief Secretary P.S. Rama Mohana Rao at the latter’s chamber in the Secretariat and handed over a report dated August 11, 2016 to him.

Details of payoffs

The report contained details of alleged payoffs to the tune of ₹39.91 crore made by a gutkha manufacturer to a minister, two top police officers, and other officials to allow the sale of banned tobacco products in Chennai.

A copy of the same report was handed over in person to then Director General of Police Ashok Kumar. The Income Tax Department has received formal acknowledgement for having sent the reports. The content in both the reports was the same except the address of the recipients.

Documents show that a day after giving the report to the then Chief Secretary, Mr. Balakrishnan wrote to Mr. Rao, saying: “In the case of alleged payments connected with State administration which were handed over to you yesterday, action as deemed fit may kindly be taken by the State administration.”

This letter was received and acknowledged on August 16, 2016, by Senior Assistant Administrative Officer D. Babu, Office of the Chief Secretary, Tamil Nadu.

Also, when the Director, Directorate of Vigilance and Anti-Corruption, M.N. Manjunatha wrote to the Income Tax Department seeking copies of the documents linking State government officials to the gutkha scam, the office of the Principal Director of Income Tax (Investigation) wrote back stating that a detailed report had already been sent to the Chief Secretary and the DGP.

Affidavit details

On July 8, 2016, the Income Tax Department had conducted simultaneous searches on the premises of the MDM brand gutkha company in Chennai.

A book of accounts seized from the residence of a lady accountant revealed huge payments allegedly made to key people.

The report sent to the Chief Secretary and the DGP contained details of the searches, relevant documents pointing to alleged corruption involving State Government officials, and the statement of the main partner of the gutkha firm.

In an affidavit filed before the Madurai Bench of the Madras High Court on Thursday (which is hearing a related case), Chief Secretary Girija Vaidhyanathan said: “During the course of hearing it was represented by the counsel for the Petitioner that the Income Tax Department had addressed a communication on 09.07.2016 to my office indicating the involvement of Police Officials in the Gutkha Scam. It is respectfully submitted that verification has been made from the records maintained by the relevant departments on behalf of my office and it is found that no such communication dated 09.07.2016 has been received from the Income Tax Department, as alleged.”

The affidavit did not mention about the letter received in August 2016.

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Printable version | Dec 8, 2021 9:46:29 AM |

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