The State Government msustained substantial mfinancial loss towards Excise revenue to the tune of Rs448 crore, including Excise duty of Rs335 crore from 2005-06 to 2010-2011 for non-disposal of ganja plants seized under various raids.
The Comptroller and Auditor General of India (CAG) in its recent report for the year 2012 also pointed out that though Bhang shops were settled for high consideration money, the poor lifting of Bhang indicated illicit sources of supply and sale.
In its report, the CAG said that 233 lakh cannabis sativas (hemp plants) valued at Rs2,328 crore at the average rate of Rs1,000 per plant were seized and destroyed by the Excise Enforcement personnel through raids in the areas of illegal cultivation by unknown cultivators in 17 districts during the last five years ending March 31, 2011.
But it said that the Excise Commissioner had not given the details of the raids, steps undertaken for confiscation of the hemp plant and reason for non-sale of the same through Central Bhang Gola or auction to the higher bidder against receipt of sale proceeds thereof and State Excise Duty.
In its audit observation, the CAG said there was no shortage of Bhang in the Central Bhang Gola and hence leaves of hemp plants seized should have been collected for manufacture of 116 kg Bhang at nominal yield of 0.5 kg per plant valued at Rs152 crore for sale through auction.
Besides, there was possible loss of Rs335 crore towards SED based on the valuation done by the State Government. It said the sale value of Bhang was fixed at Rs130 per kg and the SED was fixed at the rate of Rs220 per Kg during 2006-07 and Rs300 per kg during 2007-11.
The confiscated Bhang in any area shall be sold by auction to the highest bidder by the Superintendent of Excise subject to a reserve price equal to the amount of SED leviable and cost price payable there on at the place of sale.
The CAG also pointed out that besides the seizure of illegal hemp plants during the period 2007-2011, 23, 000 kg of Bhang valued at Rs30 lakh at the rate of Rs130 per kg was seized by the Excise authorities. However, it could not be disposed of resulting in non-realisation of SED of Rs70 lakh.