HC slams I-T department for refusing to conduct valuation of 21 sugar mills

Written by Deepa Jainani | Lucknow | Updated: Sep 29 2013, 02:15am hrs
The Allahabad High Court's Lucknow bench has come down heavily on the Income Tax department for refusing to conduct the valuation of 21 sugar mills that were sold off under the stewardship of the Mayawati government in 2011. The court's criticism came while hearing a PIL petition.

The court had on August 22 directed the I-T department to estimate within a month the value of the 21 government sugar mills which were allegedly sold to private players at throwaway prices.

An affidavit filed by the chief commissioner of the department, Lucknow, has now stated that evaluation matters are beyond the domain of the I-T department's work. The affidavit further stated that the department was responsible only for tax administration and that it does not possess the necessary manpower and resources to comply with the order.

The court asked the chief commissioner, who was present during the hearing, whether the department does valuation of taxpayers' properties. On getting an affirmative reply, the division bench, comprising Justices Abdul Mateen and DP Singh, asked why then the department could not conduct the valuation of sugar mills. These mills are also taxpayers', whose properties are the subject matter of dispute before the court," the bench stated, to which the officer replied that the department lacked manpower. The bench then directed the central PWD to provide manpower to the department.

"No public authority assigned with a subject matter, may defy the order of the court. It shall always be incumbent on the government and its authorities to comply with the directions issued by the court. The day when authorities start to defy the order of court, it shall be the end of democracy in the country. Every government and every officer of every department are obliged to comply with the commands of the court, subject to modification if any by the appellate forum," the bench stated. The court has fixed November 13 as the next date of hearing.

Large-scale anomalies have been alleged in the sale of the 21 sugar mills owned by the Uttar Pradesh Rajya Chini Evam Ganna Vikas Nigam and the Uttar Pradesh State Sugar Corporation.

The mills were sold between July 2010 and March 2011. The Comptroller and Auditor General audit found anomalies at every step of the sale from undervaluation of land and plant machinery to bid rigging and from disclosure of expected prices to stamp duty evasion.

The mills were sold to the two cartels at throwaway prices, which cost the state an estimated loss of R1,200 crore.