Days before the abrupt transfer of Delhi’s VAT commissioner, his team had unearthed a racket involving hundreds of paper companies and firms, all of them being used to transact massive amounts to evade taxes and wash black money into the official system.
The details were conveyed to the Enforcement Directorate and the Income Tax Department in a two-page letter, a copy of which is available with The Hindu . One senior official said they suspect the network was used to launder hundreds of crores annually.
The AAP government has launched an attack on the Central government over the removal of VAT commissioner Vijay Kumar without consulting it. Mr. Kumar was transferred on October 12 by the Lieutenant Governor’s office.
A letter sent by Ranjeet Singh, joint commissioner of VAT department, to the ED and I-T departments, said, “During the course of inspection conducted by the enforcement branch of the trade and taxes department at different locations, a huge racket of tax evasion was discovered where documents like fake invoices, balance sheet and various papers of transaction of different firms were found including signed blank cheque books in huge quantity.”
The letter said, “Hundred companies/firms, who are evading government tax using unfair practices like running the firm on paper only and not doing any business on real term, are also suspected to be involved in money laundering.”
On September 30, the VAT team inspected four premises. At office number 404 of Janakpuri District Centre, the team found a large number of mobile phones, computer systems, fake invoices, goods receipts (GRs), transportation documents, balance sheets, and other documents. The team found about 15 staff involved in the operations. The employees on the spot ‘admitted that they make bogus invoices, GRs, and other documents as per orders of their employer’. “They admitted that all the companies run by them are bogus and no business activities are carried out in these companies,” the letter said.
At office number 301 of Janakpuri District Centre, the team found rent agreement of several firms. At an office in Netaji Subhash Place in Pitampura, the team recovered a large number of signed blank cheque books of various firms. The employee said he makes cheques as ordered by his employer, who is suspected to be a major hawala dealer.
At the same complex in Pitampura, the VAT team found another office premise. “It is apparent that these persons are indulged in malpractices of business with the sole aim to cause damage to the government revenue,” the intimation letter said.
In the wake of the VAT commissioner’s transfer, Deputy Chief Minister Manish Sisodia said the abrupt transfer was without consulting the Delhi government and against the understanding the Centre had to consult the local government on all senior transfers in Delhi.
“We suspect the hand of lobbyists behind this decision since the VAT commissioner had been cracking down on tax evaders and, more recently, had carried out a raid against a particular group, who was operating 40 companies from a single address in Janakpuri,” Mr. Sisodia said.
“Right after the raid at the Janakpuri address, which we also suspect had hawala dealings, Mr. Kumar was transferred. The Delhi government was not consulted. This is the festival season with Diwali round the corner. This is an important time for the department. What was the urgency to remove him at this point of time? Does Prime Minister Narendra Modi want to run Delhi under pressure from lobbyists or will allow the elected government to run it? It is the Delhi government's prerogative to appoint the VAT commissioner. Such dictatorship cannot be allowed,” Mr. Sisodia said.
On Tuesday, a delegation of AAP leaders met Home Minister Rajnath Singh to demand an inquiry into the sudden transfer of the VAT commissioner.
Details were conveyed to the Enforcement Directorate and the Income Tax Department in
a two-page letter
