Delhi govt asks Reliance Energy to pay up Rs129 crore as tax

Reversing an earlier order of granting tax exemption to the tune of Rs129 crore to Anil Ambani-led group company Reliance Energy, Delhi government has told the company to pay up the amount levied on it as sales tax.

The government has conveyed this to Delhi Lokayukta Justice Manmohan Sarin who was looking into a whistleblower's complaint alleging a Rs129-crore scam involing tax liability against the company.

Following the government's stand, the Lokayukta today decided to close its probe into the complaint.

As per the Lokayukta order, Department of Trade and Tax has initiated "recovery proceedings" against Reliance Infrastructure Ltd, formerly Reliance Energy Ltd.

"In view of the setting aside of the order dated November 25, 2008, and restoration of the Assessment Order dated March 30 2006, there is no ground left for inquiring into the allegation of causing loss of Rs129 crore to the state exchequer," the order said.

When contacted, Reliance Energy refused to comment on the issue. The Lokayukta had issued notices to the government last year after admitting the complaint by the anonymous whistleblower.

The tax department had in 2006 levied a liability of over Rs129 crore on Reliance Energy. But responding to a plea by the company in November 2008, an Additional Commissioner of the Tax department had reviewed his earlier order and held that the appellant was entitled to exemption from sales tax.

This was in conflict with the stand taken by the Administrative department of the government before the Delhi High Court that the company was not entitled to such exemption.

The Lokayukta said the Law department had also expressed the view that an appeal should be filed against the order of the Additional Commissioner who had not heard the departmental representatives.

The government has now informed the anti-corruption watchdog that it had restored the tax "assesment order" issued in March 2006 against the company.

When sought for his comment, Trade and Tax Commissioner Rajendra Kumar said the judicial process will take its own course.

Closing the case, the Lokayukta also rejected accusations by the complainant that huge bribes were being paid for postings in the VAT department and a close relation of Delhi Chief Minister Sheila Dikshit was allegedly involved in this, saying the allegations "do not hold any water."

Pronouncing the order, the Lokayukta, however, came down heavily on the government for delay in submission of information pertaining to the case.

"Proceedings in this case bring out the obduracy and resistance of the government of NCT of Delhi to disclose information and to make available records to a statutory authority, namely, the Lokayukta," the order said.

"It is high time that the government of NCT of Delhi reconciles to transparency in functioning and in governance", the order said.

It said a series of letters and reminders were sent to the government seeking details in the case.

"The Department of Finance for more than six months resisted the production of relevant record and information which, if earlier furnished or produced, would have set the matter at rest," the Lokayukta said.

"There has been considerable waste of administrative time, effort and resources on account of the above action of the Finance Department of withholding the information," it added.

In an earlier order in January, The Lokayukta had come down heavily on the Finance department, accusing it of trying to "scuttle" an inquiry into the case.