Tax evasion case against oil majors

The case has been registered under Sections 420, 467, 471 and 120B of the Indian Penal Code (IPC) last week. Prominent among thebeneficiary firms are Doiab Steel Mills, KJ Steel, Durga Steel, Krishan Iron and Steel, Kushal Steel Mills, Ambika Steel and Mahaveer Steel Rolling Mills of Mandi Gobindgarh, Khanna, Amloh and Kala Amb. Vigilance Department sources said the supplies of furnace oil were made by the Hisar and Ambala depots of the three oil PSUs.

While the sale of furnace oil attracts sales tax at the rate of 10 per cent in Haryana, consumers from another state get supplies at the concessional central sales tax (CST) of only four per cent on presentation of `C’ form, a statutory form issued by the Sales Tax Department.

The FIR said the 40 firms — most of them are suspected to be bogus –allegedly faked forms to procure furnace oil at the concessional rate of four per cent. The three PSUs had released oil without checking the veracity of the forms, it added.

The furnace oil was diverted into the black market by the bogus firms for sale at a high premium in violation of the norms, which prohibit its resale. At present,furnace oil which cost about Rs 6.25 a litre attracts a premium of Rs 2 per litre in the black market.

The illegal supply of furnace oil has led to large-scale evasion of excise and income tax, it said. Vigilance department which is also probing similar supplies made to firms in Rajasthan, suspects involvement of officials of the oil majors. It has written to the PSUs to seeking information about the firms, which have been supplied oil against `C’ forms.