In the audit conducted in the sub-registrar offices, the CAG found during the scrutiny that conveyance of properties valued at Rs 4.97 crore and affected through 28 conveyance deeds registered between the years 2014 and 2016 were cancelled by deeds of cancellation citing non-receipt of consideration and failure to hand over possession of the properties.
“Scrutiny of original deeds of conveyance, however, indicated receipt of consideration by the sellers and handing over of properties to the purchasers. Since the original sellers had re-acquired right and interest over the properties from the original purchasers and the properties vested again in the vendors through cancellation deeds, these deeds were to be treated as re-conveyance deeds, involving levy of stamp duty and registration fee of Rs 39.72 lakh. The ROs, however, treated the instruments as deeds of cancellation and collected Rs 6,000. Thus, the misclassification of instruments resulted in short levy of stamp duty and registration fee of Rs 39.66 lakh,” it said.
After the audit pointed out the misclassification, the Registration Department replied that the instruments did not indicate re-conveyance of properties by the purchasers to the vendors and the IGR had clarified in December 2011 that unless it was specifically recited in the instrument that the property was re-conveyed, it could not be treated as re-conveyance.
During the course of the year 2017-18, the Registration Department accepted and recovered underassessments and other deficiencies amounting to Rs 3.22 crore in 157 cases pointed out in earlier years.
Report reveals irregular claims under new tax regime
In its first report since the implementation of the Goods and Services Tax, the Comptroller and Auditor General (CAG) has highlighted that a large number of irregular claims of transaction credit were made under the new tax regime.
“There were irregular claims of transactional credit of Rs 1,451.02 crore in respect to 4,268 cases in 153 selected assessment circles. There were excess, irregular and ineligible claims of substantial transitional credit not verified by the Commercial Tax Department,” the report stated.
In the report tabled in the Assembly on Wednesday, CAG pointed out the irregularities in GST till March 31, 2018. After GST was implemented on July 1, 2017, this is the first CAG report focusing exclusively on it and the performance of the State.
From July 1, 2017 to March 31, 2018, 96,854 dealers had not migrated to GST, of which 11,793 dealers had a turnover of more than Rs 20 lakh in the year 2016-17. It was also found out that 1,790 dealers whose registration had been cancelled under VAT regime had incorrectly migrated into GST and bifurcated between Centre and state tax authorities, the report said.
It also said that there were incorrect claims of input tax credit (ITC) by cancelled dealers, dealers who filed nil returns or did not file returns, amounting to Rs 52.22 crore. The report also blamed the Commercial Tax department for improper implementation of GST in the State.
“The Department did not have any mechanism to check and facilitate migration of dealers who were yet to migrate into GST and assessments under erstwhile Act were pending for a long time. While GST regime envisaged complete online environment, issue of manual notices defeated the purpose of GST and the assessment process continued to lack transparency,” the report stated.
Revenue raised by State govt increases
CAG report pointed out that the tax and non-tax revenue raised by the State government during the year 2017-18 had rose by 71 per cent against 68 per cent in 2016-17. The total revenue raised by the State government in 2017-18 was Rs 1,04,500.61 crore, including Rs 93,736.60 crore tax revenue. In contrast, the amount was Rs 95,855.16 crore, including Rs 85,941.40 crore tax revenue, in 2016-17.