The Hindu : Kerala / Palakkad News : Stay orders hamper RR proceedings

Online edition of India's National Newspaper
Monday, Jun 27, 2005

Kerala

Kerala - Palakkad

Stay orders hamper RR proceedings

Staff Reporter

Rs.240 crores held up due to stay orders

PALAKKAD: The cash-starved State Government could collect only Rs.19.06 crores in the last financial year against a collection demand of Rs.300.45 crores from the district because of Government and court stays issued on Revenue Recovery (RR) proceedings.

The RR target fixed for the district for the financial year 2004-05 was Rs.100 crores, which was only Rs.20 crores in the previous year. As per `Revenue Collection Details of Palakkad District' as on March 2005, the total stay issued for revenue recovery stood at a huge amount of Rs.240 crores.

The Government has stayed an amount of Rs.116.45 crores and the courts an amount of Rs.123.28 crores. Most of the Government stay orders were unconditional without specifying any time limit, making it difficult to initiate recovery proceedings. Once the stay is issued, generally on various considerations, the Government do not take further action to recover the dues.

The practice usually followed was that the defaulters are asked to pay one-third of the total amount to get a stay. But for the influential people, this condition is not imposed and unconditional stay orders without any time limit are issued by the Revenue authorities.

The maximum amount as dues in the district comes as sales tax arrears and electricity charges from companies, particularly the power intensive steel smelting units. The total stay issued on the sales tax due in the district is to the tune of Rs.25.43 crores. For example, a marble trader in Pattambi was proceeded against for recovering Rs.55 lakhs as sales tax. When the Revenue officials seized the shop to recover the dues there came an unconditional stay from the Government to stop the proceedings. The officials could do nothing to recover the dues and the Government stay continues. Thus the State exchequer is deprived of Rs.55 lakhs from a single shop.

In another incident, a power intensive unit at Kanjikode closed shop without paying an amount of Rs.91.79 crores as electricity charge. The company left the scene without making any payment as electricity charges and other dues to the Government.

Another power intensive sponge iron unit was recently auctioned by the Revenue authorities to recover Rs.51.93 crores as electricity dues. After the revenue proceedings, the company was auctioned for just Rs.6.19 crores. That too the auctioning was not confirmed by the RDO said to be under pressure from the powers that be in the Revenue Department.

The person who bid the closed company in auction paid Rs.6.19 crores to the Government but did not get the control of it so far.

The company that did not pay the electricity charges for years filed a petition in the court against the sale procedures. The Government not only lost the electricity dues to the tune of Rs.51.93 crores but also Rs.6.19 crores that it got from the revenue recovery proceedings.

Once the Government and the appellate authorities under it gave the stay orders to RR proceedings, no steps are taken to vacate it depriving the State exchequer huge amount.

Sources in the Taxes Department said that as the State was reeling under acute financial crunch, the Government should not have given such blatant stay orders to favour the defaulters.

The Revenue Department officials here said that in most cases the Government was rather inert in getting the stay vacated or winning the case quickly and recovering huge amount from the tax evaders.

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