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 regard.

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