THIRUVANANTHAPURAM: Giving more reasons for suspecting the genuineness of the previous LDF Government’s decision to grant waiver to cashew dealers who cheated the government by not paying the Central Sales Tax (CST) by stock transfer to bogus dealers, the Comptroller and Auditor General(CAG) has found that the government had violated the provisions of the CST Act. It is in the audit report (revenue receipts) for the year ended on March 2009 - Volume 1 that the CAG unearthed the Act violation. ‘Since the CST Act is enacted by Parliament, only Parliament can make any amendment to the Act. As such, the State Government has no power to issue an executive order waiving the tax, inter-state and penalty due and levied under the Act,’ the CAG report has pointed out. A highly-placed government source told ‘Express’ that then Finance Minister T M Thomas Isaac had not heeded the Law Department’s advice against granting the incorrect waiver.He said that even the Cabinet’s directive to issue notification as per Section 8(5) of the CST Act only if it was satisfying Section 8(4) of the Act had not been taken seriously. “The Minister was acting out of the way to help the cashew dealers and there was a clear case warranting a Vigilance inquiry,’’ he said. It may be recalled that the HC also had taken exception to the govt’s decision. While dismissing a revision petition filed by one of the cashew dealers, M/S Assorted Food Packers(P)Ltd, Kollam, against the Sales Tax Appellate Tribunal’s decision disallowing the exemption, Justice C N Ramachandran Nair and Justice Bhabani Prasad Ray pointed out that the Government Pleader produced a list of dealers in Delhi to whom the cashew traders in Kollam claimed to have consigned goods on stock transfer. But it was seen that out of the 40 dealers, there was only one dealer who was genuine and all the others were bogus. “Strangely, the government has condoned the fraud committed by all the dealers by giving them concessional rate of tax on the inter-state sale of goods which were bogusly accounted as stock transfers. We don’t think there is any need for us to consider the undesirable practice adopted by the govt for promoting tax fraud in the state,’’ the HC observed.
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