The objectives behind setting up of the check posts to check evasion of tax was a misnomer. I felt there was no necessity of check gates. The purpose of the check gates was to check evasion and collect taxes from registrants and casual dealers. The tax evaders escaped the gate in connivance with the officers manning the posts. The officers and inspectors were in the monthly pay roll of the transport agencies. They were afraid of the local goons of the villages or towns adjacent to the check posts and did not touch, out of fear, the vehicles of the dealers of the locality. The officers of Girisola at Andra border and Lohurachati at Chhatisgarg border let the vehicles pass unchecked of the dealers, those who were notorious, of Berhampur and Bargarh, to give example.
To show the check posts functioning and earning revenue,
the check post people collected taxes from the registered dealers. What the
registered dealers paid at the check posts, they adjusted against their due tax
payment while filing monthly or quarterly returns. The government did not gain.
The gates had always allegations of corruptions against the officers. MLAs
raised questions in the assembly; the newspapers, time and again, published
alleged corruptions of the officers. The department earned a bad name.
Haryana had check posts under Sales Tax Act. They
abolished in 1994. I, in a team of six officers, had gone to Haryana in 2004.
We saw, within four years, their tax collection had doubled. Abolition of check
posts, of course, had not increased the revenue; but, the abolition did not
have any negative impact on revenue collection, for sure.
G.C.Pati, when he was commissioner, abolished twelve
internal check posts in 1999-2000. There was no impact on the tax collection
the next year or years after.
The state went for VAT in 2005. There was absolutely
no necessity of the check posts under the new Act. Under the VAT, the buyer got
the credit of tax paid on purchases when he sold, in other words, he availed of
input tax credit. To give an example, if a buyer purchased goods worth Rs.100
and paid tax Rs. 10 @ 10%, and sold the goods at Rs.150 and collected tax on
sale Rs. 15, he would pay to the government Rs.5. To avail of input tax credit
he should have invoice. The assessing officers or the audit, in case of
suspicion, could cross verify the invoices, the purchase invoice of the buyer
with the sale invoice of the seller, to prove authenticity of the transactions.
The dealer got waybills from the office to bring goods from outside the state.
The office had the information of the dealers’ business since the latter
produced a copy of the waybill. The way bill mentioned the quantity and value
of goods. An alert officer had all the information, if he desired, to know the
integrity of a dealer.
Not only in Odisha, but in all the states, ten percent
of the dealers contributed more than eighty percent of the total tax. In Odisha, around fifteen hundred of about one
lakh and fifty thousand registered dealers paid ninety percent of tax. These
dealers did not evade tax; they might avoid paying on some legal loophole. The
law or legislature had to plug the loophole.
One day I proposed A.P.Parhi, the commissioner, to
consider abolishing the gates, referred to the nuisance the check posts caused
and argued against their continuance. He told me to draft a letter to the
government with the proposal. He was, all on a sudden, transferred before I
prepared and put up the draft.
T.K.Pandey recommended the government to abolish all
the remaining internal check posts in 2008-09.
The senior officers had vested interests, and were not
in favour of abolition of gates. Some were in a dilemma; the abolition might
boost evasion, but their vested interest weighed in favour of this argument and
the gates.
The file on recommendation of the commissioner was
with the minister. A few officers and inspectors, those who had access to the
minister pressured him not to approve the abolition. At this time, state
vigilance raided the house of an officer of Jagatpur check post on disproportionate
assets (DA) charges. The gate where he was working then located after Cuttack
on the Balasore route. The vigilance unearthed huge property, much more than
his known sources of income. The print and electronic media highlighted the
raid. The minister inquired. Pradeep Biswal, then working in the finance
department, told the minister about the officer and reminded the file for
abolition of gates was with him. The media might raise a question, the gates
bred corruption, the department had suggested for abolition, but the minister
kept the file pending with him. The minister signed the file.
There was no impact on revenue collection after
abolition of all the internal check posts.
Border check posts, seventeen in all, located at
borders with different states stayed. I wrote a few articles on no-necessity
and the need for dispensing with the gates in newspapers. The Prameya published
my article ‘Kua O Tanakhiphatak Upakhyana’
(The Episode of Well and Check Posts) on August 1, 2015. The Pioneer
published my article, ‘Abolish the Checkgates for Ease of Doing Business’ on
October 1, 2016. My articles, of course, discomfited the seniors and my
colleagues.
Manoj Ahuja, the commissioner was against the check posts.
One day I told him about the issue I had discussed with A.P.Parhi. Mr. Padhi
had told me to draft the letter, but he was transferred. Mr. Ahuja told me to
draft the proposal. He recommended to the finance department to abolish all the
check gates.
The government abolished all the check gates from
April 1, 2017. With introduction of GST from July 1, 2017, all the states
abolished the gates.
[An excerpt from my book Anichhuk Prasasak (A Reluctant Bureaucrat)]
