In yet another move that is bound to lead to confrontation with the Centre, the Arvind Kejriwal Government is going to amend a legislation that will vest policing powers to the VAT Department.
This means VAT officials can arrest any businessmen found violating payment of tax and provisions of VAT Act.
According to proposed amendment, the VAT Commissioner will enjoy absolute power to authorise VAT investigator and prosecute any trader for violation of VAT. It has also proposed maximum punishment from six month to three years for violation of VAT act. The Chief Minister and Deputy Chief Minister have discussed the proposed amendment in the VAT Act at a Cabinet meeting, which took place at the CM’s residence on Monday evening and subsequently a bill to this regard will be tabled in the Delhi Assembly.
Top sources told The Pioneer that the Delhi Cabinet on Monday evening discussed the amendment in the VAT Act, granting absolute powers to VAT commissioner, setting up special designated court, increase of punishment from six month to three year and appointment of special public prosecutor. According to proposed amendment, the Government may arrest any trader for violation of VAT act. It has also proposed that VAT Commissioner may prosecute any trader for violation of Act. The provisions was already existed in the Act but there was no elaboration and specification of the do and don’t during conducting raids.
“The Commissioner may authorise either generally or in respect of a particular case or class of cases any officer or person subordinate to him to investigate all or any of the offences punishable under this Act. Every officer or person so authorised shall, in the conduct of such investigation, exercise the powers conferred by the Code of Criminal Procedure, 1973 (2 of 1974) upon an officer in charge of a police station for the investigation of a cognisable offence,” the proposal said. The existing act has provisions of imprisonment of six month but now the amendment has proposed three month imprisonment for violation of tax valued over Rs 1crore. “All records, books of accounts, registers and other documents, maintained by a dealer, transporter or operator of a
warehouse shall, at all reasonable times, be open to inspection by the Commissioner,” the proposal said.
Insiders said the Delhi Government has failed to make rules pertaining to do and don’t of conducting raids against traders. “There should be norms to check records and what should VAT officials do during raids against erring traders,” said insiders.
The VAT growth rate in Delhi has continued to dip despite the AAP Government hiking VAT on petrol and diesel and bringing officers of their own choice in the Trade and Taxes department. The total collection of VAT is Rs 12,850 crore till November this year. The gap between Rs 12,850 crore and Rs 11,250 crore is huge and only four months have been left in the current financial year.
The main reason for the drop in VAT collections is being attributed to the fact that there was trust deficit between the Government and its top bureaucrats ultimately taking its toll on the day-to-day functioning of the Delhi Government. The VAT department is finding difficult to meet the target of Rs 24,000 crore in the current fiscal year. The VAT target was increased from Rs 18,554.91 crore, it had raised in the previous financial year to Rs 24,000 crore in 2015-16.
After assuming the charge of CM of Delhi in February this year, Kejriwal had assured traders and businessmen that unnecessary raids would be stopped but they should honestly pay taxes to the Government.