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CAG raps TN govt for "wasteful expenditure"

Last Updated: Wednesday, July 22, 2009 - 17:58

Chennai: The Comptroller and Auditor General of India has rapped the Tamil Nadu government for "wasteful expenditure" of over Rs 10 crore on a new Secretariat complex proposed by AIADMK government in 2003, shelved by the ruling DMK in 2007.
In its report for the year ended March 31, 2008, CAG said
preliminary works were taken up without obtaining mandatory
clearance from the Union Environment and Forests Ministry.

The government had incurred a loss of Rs 2.55 crore as
wasteful expenditure and another Rs 8.02 crore as contractual
liability, claimed by a consultancy firm, which is pending
settlement, the CAG said.

The Environment Ministry had issued draft notification in
Oct 2003, a month after the government decided to build the
new complex on 43.20 acres at Kotturpuram, making mandatory
its clearance and a final notification in July 2004 in this

The Chennai Metropolitan Development Authority (CDMA),
entrusted with the task of selecting architects and
construction agency, moved the Madras High Court against the
notification, the CAG said, adding CMDA went ahead with
"preparatory work"even as a decision was pending in the court.

The state government had cancelled the order for building
the complex in June 2007, as a new building was coming up at
the Omandurar government estate.

When it was referred to the government in Jan 2008, it
said the expenditure was incurred with "good intention of
executing the project". The entire shifting operation stopped
after careful examination of aspects, it said.

The CAG also pulled up the state government for failing to
implement the provisions of acts and rules and ineffective
monitoring of vehicle tax collection, resulting in short
recovery of revenue to the tune of more than Rs 250 crore.

From April 2002 to March 2007, the government had issued
1,56,744 permits under the Tamil Nadu Vehicles Taxation Act,
allowing motor vehicles to operate as `contract carriages` on
tour from one point to another, without collecting the tax as
applicable to contract carriages for the period of permit
ending March 31 2008, the CAG report said.

Vehicle owners were liable to pay tax of Rs 258.55 crore
against which only Rs 25.19 crore was collected. This resulted
in short recovery of revenue of Rs 233.36 crore.

On non-raising of demand of lifetime tax, it said the
government in 1998 levied the tax on non-transport vehicles.
This was challenged by vehicle owners in the Supreme Court,
which in march 2005 held the levy as valid. The court in April
2006 directed all registering officers to ensure that details
of these vehicles were kept in separate registers meant for
watching the difference of tax.

However, after checking the records, it was revealed that
the registers were incomplete. As many as 2,300 vehicle owners
registered between November 1999 and September 2000 were
liable to pay difference of lifetime tax of Rs 3.18 crore.

But the department did not raise the demand and it was not
pointed out by internal audit. Failure to follow instructions
resulted in non-realisation of Rs 3.18 crore revenue.

Other irregularities like non collection of composite tax
of Rs 43 lakh and of fee of Rs 2.02 crore for transfer of permits
were also listed by the CAG report.

Bureau Report

First Published: Wednesday, July 22, 2009 - 17:58
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