JUNE 14: The ministry of petroleum's move to curb the rampant tax evasion in sales of diesel across the country has spread shockwaves across the industry as it gives policemen as well as bureaucrats virtually unbridled powers. And opens the door for further harassment as well as more corruption.But first, the order itself. Under the order, only users who have valid licenses from the state government and the relevant civil supply authorities will be allowed to store diesel. This, in turn, has been done because it was found that diesel was being shown as sold to registered firms (to avail of sales tax concessions), but was actually sold to other firms - all told, the tax evasion is believed to be of the order of Rs 1,000 crore.So, what the government did was to issue a notification to plug these loopholes, to ensure that no fictitious sales of diesel were reported, while the actual sales were made to other units. This is, however, where the problem comes in as well.Under the gazette notification, signed by the additional secretary in the ministry Naresh Narad, any gazetted officer or any police officer not below the rank of Deputy Superintendent can simply enter and search any place `being used or suspected to be used . where there is reason to believe that the provisions of this order have been or are being or about to be contravened.' Similarly, they have the power to stop and search any person or vehicle or receptacle which is `used or intended to be used' for moving diesel for illegal sales or sales on which taxes are being evaded.Samples can be taken from products which are `about to be used' in contravention of the order.Who is to decide what is `intended to be used' or what is `about to be used' or `about to be contravened'? The notification talks of how the police officer has to be authorised by an order of the Central or State government, and so on. But clearly there's enough room for unscrupulous policemen and other government inspectors to be able to demand their pound of flesh from the trade.
