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Amritsar dealer in tax evasion linked to Joshi
Ruchika M Khanna
Tribune News Service

Chandigarh, September 22
Punjab Excise and Taxation Department has detected massive tax evasion by an Amritsar-based supplier of Haldiram goods in Punjab. But the department is reportedly unable to act against the dealer's two dealerships, both owned by a trader, allegedly enjoying political patronage of Punjab Local Bodies minister, Anil Joshi.

The two companies, Apex Marketing and Pioneer Sales, which are distributors of Haldiram goods, have paid just about three per cent tax on the gross turnover. The excise department suspects that by showing unusually high tax free sales; showing large quantities of goods as spoilt; and by maintaining that they have been giving huge cash discounts, the Amritsar based dealerships have tried to show less sale and thus evaded paying VAT (@ 14.30 per cent).

The two companies are under the scanner after the state’s taxation department found it suspicious that the taxable sales of the two companies are far lower (almost 50 per cent) than the sales shown by all other dealers of Haldiram foods in Punjab.

The excise department has calculated that the two dealerships of Haldiram foods have paid just Rs 2.56 crore as tax between April 2012 and March 2014 though the tax due to them was Rs 10.9 crore. Thus, tax worth Rs 7.39 crore has been evaded by the two dealerships. But before the state Excise and Taxation Department could begin recovery by issuing them a notice, the dealer has sought refuge under Local Bodies minister Anil Joshi.

While officials in excise department say they are unable to act against the dealers as the minister has been pressuring them, the minister, when contacted by The Tribune, said he was only trying to “help a trader, who is his supporter too”.

“It’s a standard practice that people approach politicians in case they are in trouble. The dealer, Gurjinder Singh, is a constituent of my area in Amritsar, and approached me as a public representative of the area. He is willing to show all documents to the excise department, but in case any trader feels harassed by government officials and complains, as a minister I can call department officials and check,” said Joshi, adding that he had no intention of pressuring any official.

Deputy Chief Minister Sukhbir Singh Badal, who is also Excise and Taxation Minister, told The Tribune that he was all for a fair and independent probe. “Though I haven’t examined the case, anybody found evading tax and causing losses to the government will not be spared,” he said.

Officials in Excise and Taxation Department told The Tribune that as soon as the tax evasion came to their knowledge, they summoned Gurjinder Singh. However, the latter approached the minister, who has allegedly been asking the department to “go slow on investigation.”

Officials say that there is incriminating evidence against the two dealerships. In order to substantiate their argument that they were justified in summoning the dealer, the department has got a comparative analysis of the tax paid by two other wholesale dealers of Haldiram goods in Punjab – one at Ludhiana and another at Mohali.

“One dealer has a smaller gross turnover (Rs 41.63 crore) as against Apex Marketing, whose gross turnover is Rs 44.25 crore between April 2012 and March 2014. While the former is paying Rs 4.87 crore as tax (11.7 per cent of gross turnover), Apex Marketing is paying just 1.27 crore as tax (2.9 per cent of gross turnover). 

Modus operandi

* The excise department suspects that by showing unusually high tax free sales; showing large quantities of goods as spoilt; and by maintaining that they have been giving huge cash discounts, the Amritsar based dealerships have tried to show less sale, thus evading VAT.

* The department says tax worth Rs 7.39 crore has been evaded by the two dealerships.

* But before the state Excise and Taxation Department could begin recovery, the dealer has sought refuge under Local Bodies minister Anil Joshi.

Minister clarifies

It’s a standard practice that people approach politicians in case they are in trouble. The dealer, Gurjinder Singh, is a constituent of my area in Amritsar, and approached me as a public representative of the area. —  Anil Joshi, local bodies minister