Tax evasion -- Oil cos say they're not to blame

Tax evasion -- Oil cos say they're not to blame

NEW DELHI, JUNE 8: While investigations are still being carried out on the suspected tax evasion of around Rs 1,000 crore in the sale of diesel by public sector oil firms, the oil firms have told the ministry of petroleum that they are not to blame. Instead, they argue, if anyone is to blame it is the sales tax department as well as the fire and explosives departments.

While Narayan argued that oil firm officials must have been involved in the tax evasion since they were supplying diesel at the central sales tax rates to fictitious users, the oil firms have said that this is untrue. IOC, for instance, has given written statements to the ministry on particular cases brought to its notice, to this effect.

One of the charges made, for instance, was that Aman Paints to whom diesel had been supplied to by IOC, was no longer in existence and that its registration had been cancelled on April 15, 1999, and that it had no storage license. In its reply, IOC has stated that the fact that Aman had an Explosives Department license was proof that it still existed -- any user of petroleum products has to get an explosive and fire clearance first and this is given after the departments inspect the user's premises.

Similarly, apart from the fact that the explosives department was supposed to verify the premises of users, even the sales tax department is obliged to do the same. Users who get a `C' form registration get this only after the sales tax officials have satisfied themselved that these companies exist, that they are producing the quantity of goods they claim to and so on. In the event, IOC added that since Aman had attached its sales tax certificate as well, so there was no reason to suspect that the unit did not exist.

Besides, IOC said that Aman had bought the diesel against valid `C' forms -- if its sales tax registration had indeed been cancelled, then surely the sales tax department should have collected all unused `C' forms as well. So, why should an oil firm be punished for the fault of other government departments?