Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 150
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Code Context


        trigger_error($message, E_USER_DEPRECATED);

    }
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 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php.'
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deprecationWarning - CORE/src/Core/functions.php, line 311
Cake\Http\ServerRequest::offsetGet() - CORE/src/Http/ServerRequest.php, line 2421
App\Controller\ArtileDetailController::index() - APP/Controller/ArtileDetailController.php, line 150
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Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 120
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Cake\Routing\Middleware\RoutingMiddleware::__invoke() - CORE/src/Routing/Middleware/RoutingMiddleware.php, line 162
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Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51
Cake\Http\Server::run() - CORE/src/Http/Server.php, line 98

Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 151
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Code Context


        trigger_error($message, E_USER_DEPRECATED);

    }
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 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php.'
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deprecationWarning - CORE/src/Core/functions.php, line 311
Cake\Http\ServerRequest::offsetGet() - CORE/src/Http/ServerRequest.php, line 2421
App\Controller\ArtileDetailController::index() - APP/Controller/ArtileDetailController.php, line 151
Cake\Controller\Controller::invokeAction() - CORE/src/Controller/Controller.php, line 610
Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 120
Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 94
Cake\Http\BaseApplication::__invoke() - CORE/src/Http/BaseApplication.php, line 235
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Routing\Middleware\RoutingMiddleware::__invoke() - CORE/src/Routing/Middleware/RoutingMiddleware.php, line 162
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Routing\Middleware\AssetMiddleware::__invoke() - CORE/src/Routing/Middleware/AssetMiddleware.php, line 97
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51
Cake\Http\Server::run() - CORE/src/Http/Server.php, line 98

Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]
Code Context
            if (Configure::read('debug')) {

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        LATEST NEWS UPDATES | Following the domestic iron ore trail-Sudipto Mondal    </title>
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-The Hindu


&nbsp;


&nbsp;


The travails of an official who tried to trace the route, destination of the ore


THE STORY SO FAR


A six-month investigation by The Hindu shows that 350 million tonnes of iron ore was transported out of Bellary between 2006 and..."/>
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-The Hindu


&nbsp;


&nbsp;


The travails of an official who tried to trace the route, destination of the ore


THE STORY SO FAR


A six-month investigation by The Hindu shows that 350 million tonnes of iron ore was transported out of Bellary between 2006 and..." />
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                            <div align="justify">-The Hindu</div><div align="justify">&nbsp;</div><p align="justify">&nbsp;</p><p align="justify"><em>The travails of an official who tried to trace the route, destination of the ore</em></p><p align="justify"><em>THE STORY SO FAR</em></p><p align="justify"><em>A six-month investigation by The Hindu shows that 350 million tonnes of iron ore was transported out of Bellary between 2006 and 2010 costing the exchequer over Rs. 1 lakh crore. The Lokayukta report had pegged the loss at Rs. 12,228 crore. Our investigation showed that 200 million tonnes of ore was transported by rail and the remaining by road. Of the 350 million tonnes, 224.3 million tonnes was sold domestically resulting in the evasion of Rs. 2,000 crore in commercial taxes.</em></p><p align="justify"><em>Bangalore: </em>If 224.3 million tonnes of iron ore from Bellary was sold in the domestic market, several questions arise. Where was the ore transported to? Who were the buyers and sellers? Most importantly, how did the Karnataka Commercial Tax Department allow revenues of Rs. 2,000 crore in VAT to pass under its nose?</p><p align="justify">The answers to these require a full-fledged official investigation as they are beyond the reach of a journalistic probe. Written submissions (copies of which are with The Hindu) to his superiors by a Bellary-based Commercial Tax officer offer some clues. His attempts to trace the route and destination of the ore that left his jurisdiction yielded some interesting clues.</p><p align="justify"><em>To Gujarat</em></p><p align="justify">In January 2010, Deputy Commissioner of Commercial Taxes (Enforcement) Josephat Andrews, accompanied by Commercial Tax Officer (Enforcement) B.C. Fernandez, traced several large &lsquo;for export' consignments from Bellary to dealers Gandhidam in Kutch district, Gujarat. When questioned, the 10 dealers in Gandhidam initially submitted that they had received Rs. 775-crore worth iron ore from 112 traders in Bellary.</p><p align="justify">Mr. Andrews and Mr. Fernandez probed further.</p><p align="justify">In a letter dated February 25, 2010, to the then Joint Commissioner of Commercial Taxes S.K. Naikar, Mr. Andrews said the Gujarat-based Gallant Metal Ltd. had initially claimed that it received ore worth Rs. 86.54 crore between 2005 and 2010. When he checked the firm's balance sheet for the same period, however, he discovered that it had actually received Rs. 289.57 crore worth of ore from Bellary.</p><p align="justify">Similarly, SAL Steel Ltd. had submitted that it had received ore worth Rs. 11.39 crore from Bellary, but in their books of accounts it was found that the firm had received ore worth Rs. 250 crore. Mr. Andrews, in his letter, complained that many firms in Gandhidam did not cooperate with his investigation. He named a senior Deputy Commissioner of Commercial Taxes in Gandhidham as not having assisted his inquiry at all.</p><p align="justify"><em>Firms cease</em></p><p align="justify">Mr. Andrews tried to trace the firms in Bellary that had supplied ore to Gujarat, only to discover that most had ceased to exist.</p><p align="justify">The one firm that was still operational was Vijaya Leasing Company, owned by Dushyant Reddy, brother-in-law of late Andhra Pradesh Chief Minister Y.S. Rajashekhar Reddy. His letter says he was forced to leave the premises within an hour of his visit to the firm on July 23, 2009.</p><p align="justify">In a letter to his immediate superior, Joint Commissioner of Commercial Taxes (Enforcement) A.K.Y. Syed dated July 30, 2009, Mr. Andrews has narrated what happened. It illustrates why the former Lokayukta N. Santosh Hegde referred to Bellary as a republic of the mining mafia, led by the Reddy brothers. (see box: The Republic of Bellary)</p><p align="justify">Two days after receiving Mr. Andrews' letter, Mr. Syed wrote to the Commissioner of Commercial Taxes Pradeep Singh Kharola, calling his attention to large-scale VAT evasion by firms in Bellary, including Vijaya Leasing. He told him that Mr. Andrews had been &quot;intimidated&quot; and was not allowed to inspect the books of Vijaya Leasing. He asked Mr. Kharola for support to obtain documents such as forest permits and Form 26 (filed by mine owners with the Department of Mines and Geology).</p><p align="justify">Mr. Kharola did not reply, nor did he respond to The Hindu's request for his views.</p><p align="justify">Mr. Andrews had evidence of ore being supplied to sponge iron and steel factories in Sholapur and Kolhapur in Maharashtra, and in Goa. Despite requests, he was not given permission to investigate the factories.</p><p align="justify"><em>Departmental inquiry</em></p><p align="justify">Mr. Andrews is now facing a departmental enquiry for &quot;not completing the investigation&quot; into VAT evasion by iron ore dealers in Bellary. Till its completion his promotion, which was due in November 2012, has been put on hold. When contacted, he too refused to comment on the case.</p><p align="justify">The then Commissioner of the Department Yogendra Tripathi did not respond to questions emailed by The Hindu on August 31, 2012.</p><p align="justify">A senior tax official, who spoke to The Hindu on Mr. Tripathi's behalf in September 2012, dismissed the documents showing large iron ore supplies to Indian firms as &quot;speculative bogus&quot;, reiterating that the scam was triggered by overseas demand. &quot;There was no domestic demand, supply or production those days,&quot; he said.</p><p align="justify">The Steel Ministry's projections were, however, just the opposite. &quot;The Indian steel industry had entered into a new development stage from 2007-08, riding high on the resurgent economy and rising demand for steel,&quot; its website notes. This period saw a &quot;rapid rise in production&quot; with India becoming the &quot;fourth-largest producer of crude steel and the largest producer of sponge iron in the world&quot;.</p><p align="justify">At two per cent of its total value, the 220 million tonnes of ore supplied to Indian firms should have fetched the Commercial Tax Department revenues of nearly Rs. 2,000 crore as VAT. The bureaucrat who spoke on behalf of Mr. Tripathi said only about Rs. 50 crore was collected between 2006 and 2010 as VAT from the domestic sale of iron ore originating in Bellary.</p><p align="justify">He said taxes lost in Karnataka could have been recovered in the form of Central Sales Tax paid by manufacturers at every stage of value-addition. This argument, however, does not absolve the Commercial Tax Department for their laxity in collecting taxes.</p><p align="justify"><em>Correction</em></p><p align="justify">Owing to unforeseen production problems, several errors occurred in the graphic that accompanied Monday's story titled &lsquo;Mining scam keeps getting bigger'. </p>                                                           
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    <br><a href="http://www.thehindu.com/news/national/karnataka/following-the-domestic-iron-ore-trail/article4823969.ece?homepage=true" class="re" target="_blank">The Hindu, 17 June, 2013, http://www.thehindu.com/news/national/karnataka/following-the-domestic-iron-ore-trail/article4823969.ece?homepage=true</a><div class="clear"></div>
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        LATEST NEWS UPDATES | Following the domestic iron ore trail-Sudipto Mondal    </title>
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-The Hindu


&nbsp;


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The travails of an official who tried to trace the route, destination of the ore


THE STORY SO FAR


A six-month investigation by The Hindu shows that 350 million tonnes of iron ore was transported out of Bellary between 2006 and..."/>
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-The Hindu


&nbsp;


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The travails of an official who tried to trace the route, destination of the ore


THE STORY SO FAR


A six-month investigation by The Hindu shows that 350 million tonnes of iron ore was transported out of Bellary between 2006 and..." />
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    <h1 class="cat-box-title">Following the domestic iron ore trail-Sudipto Mondal</h1>
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                            <div align="justify">-The Hindu</div><div align="justify">&nbsp;</div><p align="justify">&nbsp;</p><p align="justify"><em>The travails of an official who tried to trace the route, destination of the ore</em></p><p align="justify"><em>THE STORY SO FAR</em></p><p align="justify"><em>A six-month investigation by The Hindu shows that 350 million tonnes of iron ore was transported out of Bellary between 2006 and 2010 costing the exchequer over Rs. 1 lakh crore. The Lokayukta report had pegged the loss at Rs. 12,228 crore. Our investigation showed that 200 million tonnes of ore was transported by rail and the remaining by road. Of the 350 million tonnes, 224.3 million tonnes was sold domestically resulting in the evasion of Rs. 2,000 crore in commercial taxes.</em></p><p align="justify"><em>Bangalore: </em>If 224.3 million tonnes of iron ore from Bellary was sold in the domestic market, several questions arise. Where was the ore transported to? Who were the buyers and sellers? Most importantly, how did the Karnataka Commercial Tax Department allow revenues of Rs. 2,000 crore in VAT to pass under its nose?</p><p align="justify">The answers to these require a full-fledged official investigation as they are beyond the reach of a journalistic probe. Written submissions (copies of which are with The Hindu) to his superiors by a Bellary-based Commercial Tax officer offer some clues. His attempts to trace the route and destination of the ore that left his jurisdiction yielded some interesting clues.</p><p align="justify"><em>To Gujarat</em></p><p align="justify">In January 2010, Deputy Commissioner of Commercial Taxes (Enforcement) Josephat Andrews, accompanied by Commercial Tax Officer (Enforcement) B.C. Fernandez, traced several large &lsquo;for export' consignments from Bellary to dealers Gandhidam in Kutch district, Gujarat. When questioned, the 10 dealers in Gandhidam initially submitted that they had received Rs. 775-crore worth iron ore from 112 traders in Bellary.</p><p align="justify">Mr. Andrews and Mr. Fernandez probed further.</p><p align="justify">In a letter dated February 25, 2010, to the then Joint Commissioner of Commercial Taxes S.K. Naikar, Mr. Andrews said the Gujarat-based Gallant Metal Ltd. had initially claimed that it received ore worth Rs. 86.54 crore between 2005 and 2010. When he checked the firm's balance sheet for the same period, however, he discovered that it had actually received Rs. 289.57 crore worth of ore from Bellary.</p><p align="justify">Similarly, SAL Steel Ltd. had submitted that it had received ore worth Rs. 11.39 crore from Bellary, but in their books of accounts it was found that the firm had received ore worth Rs. 250 crore. Mr. Andrews, in his letter, complained that many firms in Gandhidam did not cooperate with his investigation. He named a senior Deputy Commissioner of Commercial Taxes in Gandhidham as not having assisted his inquiry at all.</p><p align="justify"><em>Firms cease</em></p><p align="justify">Mr. Andrews tried to trace the firms in Bellary that had supplied ore to Gujarat, only to discover that most had ceased to exist.</p><p align="justify">The one firm that was still operational was Vijaya Leasing Company, owned by Dushyant Reddy, brother-in-law of late Andhra Pradesh Chief Minister Y.S. Rajashekhar Reddy. His letter says he was forced to leave the premises within an hour of his visit to the firm on July 23, 2009.</p><p align="justify">In a letter to his immediate superior, Joint Commissioner of Commercial Taxes (Enforcement) A.K.Y. Syed dated July 30, 2009, Mr. Andrews has narrated what happened. It illustrates why the former Lokayukta N. Santosh Hegde referred to Bellary as a republic of the mining mafia, led by the Reddy brothers. (see box: The Republic of Bellary)</p><p align="justify">Two days after receiving Mr. Andrews' letter, Mr. Syed wrote to the Commissioner of Commercial Taxes Pradeep Singh Kharola, calling his attention to large-scale VAT evasion by firms in Bellary, including Vijaya Leasing. He told him that Mr. Andrews had been &quot;intimidated&quot; and was not allowed to inspect the books of Vijaya Leasing. He asked Mr. Kharola for support to obtain documents such as forest permits and Form 26 (filed by mine owners with the Department of Mines and Geology).</p><p align="justify">Mr. Kharola did not reply, nor did he respond to The Hindu's request for his views.</p><p align="justify">Mr. Andrews had evidence of ore being supplied to sponge iron and steel factories in Sholapur and Kolhapur in Maharashtra, and in Goa. Despite requests, he was not given permission to investigate the factories.</p><p align="justify"><em>Departmental inquiry</em></p><p align="justify">Mr. Andrews is now facing a departmental enquiry for &quot;not completing the investigation&quot; into VAT evasion by iron ore dealers in Bellary. Till its completion his promotion, which was due in November 2012, has been put on hold. When contacted, he too refused to comment on the case.</p><p align="justify">The then Commissioner of the Department Yogendra Tripathi did not respond to questions emailed by The Hindu on August 31, 2012.</p><p align="justify">A senior tax official, who spoke to The Hindu on Mr. Tripathi's behalf in September 2012, dismissed the documents showing large iron ore supplies to Indian firms as &quot;speculative bogus&quot;, reiterating that the scam was triggered by overseas demand. &quot;There was no domestic demand, supply or production those days,&quot; he said.</p><p align="justify">The Steel Ministry's projections were, however, just the opposite. &quot;The Indian steel industry had entered into a new development stage from 2007-08, riding high on the resurgent economy and rising demand for steel,&quot; its website notes. This period saw a &quot;rapid rise in production&quot; with India becoming the &quot;fourth-largest producer of crude steel and the largest producer of sponge iron in the world&quot;.</p><p align="justify">At two per cent of its total value, the 220 million tonnes of ore supplied to Indian firms should have fetched the Commercial Tax Department revenues of nearly Rs. 2,000 crore as VAT. The bureaucrat who spoke on behalf of Mr. Tripathi said only about Rs. 50 crore was collected between 2006 and 2010 as VAT from the domestic sale of iron ore originating in Bellary.</p><p align="justify">He said taxes lost in Karnataka could have been recovered in the form of Central Sales Tax paid by manufacturers at every stage of value-addition. This argument, however, does not absolve the Commercial Tax Department for their laxity in collecting taxes.</p><p align="justify"><em>Correction</em></p><p align="justify">Owing to unforeseen production problems, several errors occurred in the graphic that accompanied Monday's story titled &lsquo;Mining scam keeps getting bigger'. </p>                                                           
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    <br><a href="http://www.thehindu.com/news/national/karnataka/following-the-domestic-iron-ore-trail/article4823969.ece?homepage=true" class="re" target="_blank">The Hindu, 17 June, 2013, http://www.thehindu.com/news/national/karnataka/following-the-domestic-iron-ore-trail/article4823969.ece?homepage=true</a><div class="clear"></div>
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        LATEST NEWS UPDATES | Following the domestic iron ore trail-Sudipto Mondal    </title>
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-The Hindu


&nbsp;


&nbsp;


The travails of an official who tried to trace the route, destination of the ore


THE STORY SO FAR


A six-month investigation by The Hindu shows that 350 million tonnes of iron ore was transported out of Bellary between 2006 and..."/>
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-The Hindu


&nbsp;


&nbsp;


The travails of an official who tried to trace the route, destination of the ore


THE STORY SO FAR


A six-month investigation by The Hindu shows that 350 million tonnes of iron ore was transported out of Bellary between 2006 and..." />
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                            <div align="justify">-The Hindu</div><div align="justify">&nbsp;</div><p align="justify">&nbsp;</p><p align="justify"><em>The travails of an official who tried to trace the route, destination of the ore</em></p><p align="justify"><em>THE STORY SO FAR</em></p><p align="justify"><em>A six-month investigation by The Hindu shows that 350 million tonnes of iron ore was transported out of Bellary between 2006 and 2010 costing the exchequer over Rs. 1 lakh crore. The Lokayukta report had pegged the loss at Rs. 12,228 crore. Our investigation showed that 200 million tonnes of ore was transported by rail and the remaining by road. Of the 350 million tonnes, 224.3 million tonnes was sold domestically resulting in the evasion of Rs. 2,000 crore in commercial taxes.</em></p><p align="justify"><em>Bangalore: </em>If 224.3 million tonnes of iron ore from Bellary was sold in the domestic market, several questions arise. Where was the ore transported to? Who were the buyers and sellers? Most importantly, how did the Karnataka Commercial Tax Department allow revenues of Rs. 2,000 crore in VAT to pass under its nose?</p><p align="justify">The answers to these require a full-fledged official investigation as they are beyond the reach of a journalistic probe. Written submissions (copies of which are with The Hindu) to his superiors by a Bellary-based Commercial Tax officer offer some clues. His attempts to trace the route and destination of the ore that left his jurisdiction yielded some interesting clues.</p><p align="justify"><em>To Gujarat</em></p><p align="justify">In January 2010, Deputy Commissioner of Commercial Taxes (Enforcement) Josephat Andrews, accompanied by Commercial Tax Officer (Enforcement) B.C. Fernandez, traced several large &lsquo;for export' consignments from Bellary to dealers Gandhidam in Kutch district, Gujarat. When questioned, the 10 dealers in Gandhidam initially submitted that they had received Rs. 775-crore worth iron ore from 112 traders in Bellary.</p><p align="justify">Mr. Andrews and Mr. Fernandez probed further.</p><p align="justify">In a letter dated February 25, 2010, to the then Joint Commissioner of Commercial Taxes S.K. Naikar, Mr. Andrews said the Gujarat-based Gallant Metal Ltd. had initially claimed that it received ore worth Rs. 86.54 crore between 2005 and 2010. When he checked the firm's balance sheet for the same period, however, he discovered that it had actually received Rs. 289.57 crore worth of ore from Bellary.</p><p align="justify">Similarly, SAL Steel Ltd. had submitted that it had received ore worth Rs. 11.39 crore from Bellary, but in their books of accounts it was found that the firm had received ore worth Rs. 250 crore. Mr. Andrews, in his letter, complained that many firms in Gandhidam did not cooperate with his investigation. He named a senior Deputy Commissioner of Commercial Taxes in Gandhidham as not having assisted his inquiry at all.</p><p align="justify"><em>Firms cease</em></p><p align="justify">Mr. Andrews tried to trace the firms in Bellary that had supplied ore to Gujarat, only to discover that most had ceased to exist.</p><p align="justify">The one firm that was still operational was Vijaya Leasing Company, owned by Dushyant Reddy, brother-in-law of late Andhra Pradesh Chief Minister Y.S. Rajashekhar Reddy. His letter says he was forced to leave the premises within an hour of his visit to the firm on July 23, 2009.</p><p align="justify">In a letter to his immediate superior, Joint Commissioner of Commercial Taxes (Enforcement) A.K.Y. Syed dated July 30, 2009, Mr. Andrews has narrated what happened. It illustrates why the former Lokayukta N. Santosh Hegde referred to Bellary as a republic of the mining mafia, led by the Reddy brothers. (see box: The Republic of Bellary)</p><p align="justify">Two days after receiving Mr. Andrews' letter, Mr. Syed wrote to the Commissioner of Commercial Taxes Pradeep Singh Kharola, calling his attention to large-scale VAT evasion by firms in Bellary, including Vijaya Leasing. He told him that Mr. Andrews had been &quot;intimidated&quot; and was not allowed to inspect the books of Vijaya Leasing. He asked Mr. Kharola for support to obtain documents such as forest permits and Form 26 (filed by mine owners with the Department of Mines and Geology).</p><p align="justify">Mr. Kharola did not reply, nor did he respond to The Hindu's request for his views.</p><p align="justify">Mr. Andrews had evidence of ore being supplied to sponge iron and steel factories in Sholapur and Kolhapur in Maharashtra, and in Goa. Despite requests, he was not given permission to investigate the factories.</p><p align="justify"><em>Departmental inquiry</em></p><p align="justify">Mr. Andrews is now facing a departmental enquiry for &quot;not completing the investigation&quot; into VAT evasion by iron ore dealers in Bellary. Till its completion his promotion, which was due in November 2012, has been put on hold. When contacted, he too refused to comment on the case.</p><p align="justify">The then Commissioner of the Department Yogendra Tripathi did not respond to questions emailed by The Hindu on August 31, 2012.</p><p align="justify">A senior tax official, who spoke to The Hindu on Mr. Tripathi's behalf in September 2012, dismissed the documents showing large iron ore supplies to Indian firms as &quot;speculative bogus&quot;, reiterating that the scam was triggered by overseas demand. &quot;There was no domestic demand, supply or production those days,&quot; he said.</p><p align="justify">The Steel Ministry's projections were, however, just the opposite. &quot;The Indian steel industry had entered into a new development stage from 2007-08, riding high on the resurgent economy and rising demand for steel,&quot; its website notes. This period saw a &quot;rapid rise in production&quot; with India becoming the &quot;fourth-largest producer of crude steel and the largest producer of sponge iron in the world&quot;.</p><p align="justify">At two per cent of its total value, the 220 million tonnes of ore supplied to Indian firms should have fetched the Commercial Tax Department revenues of nearly Rs. 2,000 crore as VAT. The bureaucrat who spoke on behalf of Mr. Tripathi said only about Rs. 50 crore was collected between 2006 and 2010 as VAT from the domestic sale of iron ore originating in Bellary.</p><p align="justify">He said taxes lost in Karnataka could have been recovered in the form of Central Sales Tax paid by manufacturers at every stage of value-addition. This argument, however, does not absolve the Commercial Tax Department for their laxity in collecting taxes.</p><p align="justify"><em>Correction</em></p><p align="justify">Owing to unforeseen production problems, several errors occurred in the graphic that accompanied Monday's story titled &lsquo;Mining scam keeps getting bigger'. </p>                                                           
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    <br><a href="http://www.thehindu.com/news/national/karnataka/following-the-domestic-iron-ore-trail/article4823969.ece?homepage=true" class="re" target="_blank">The Hindu, 17 June, 2013, http://www.thehindu.com/news/national/karnataka/following-the-domestic-iron-ore-trail/article4823969.ece?homepage=true</a><div class="clear"></div>
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Following the domestic iron ore trail-Sudipto Mondal

Published on Jun 18, 2013   Modified on Jun 18, 2013

-The Hindu     The travails of an official who tried to trace the route, destination of the ore THE STORY SO FAR A six-month investigation by The Hindu shows that 350 million tonnes of iron ore was transported out of Bellary between 2006 and 2010 costing the exchequer over Rs. 1 lakh crore. The Lokayukta report had pegged the loss at Rs. 12,228 crore. Our investigation showed that 200 million tonnes of ore was transported by rail and the remaining by road. Of the 350 million tonnes, 224.3 million tonnes was sold domestically resulting in the evasion of Rs. 2,000 crore in commercial taxes. Bangalore: If 224.3 million tonnes of iron ore from Bellary was sold in the domestic market, several questions arise. Where was the ore transported to? Who were the buyers and sellers? Most importantly, how did the Karnataka Commercial Tax Department allow revenues of Rs. 2,000 crore in VAT to pass under its nose? The answers to these require a full-fledged official investigation as they are beyond the reach of a journalistic probe. Written submissions (copies of which are with The Hindu) to his superiors by a Bellary-based Commercial Tax officer offer some clues. His attempts to trace the route and destination of the ore that left his jurisdiction yielded some interesting clues. To Gujarat In January 2010, Deputy Commissioner of Commercial Taxes (Enforcement) Josephat Andrews, accompanied by Commercial Tax Officer (Enforcement) B.C. Fernandez, traced several large ‘for export' consignments from Bellary to dealers Gandhidam in Kutch district, Gujarat. When questioned, the 10 dealers in Gandhidam initially submitted that they had received Rs. 775-crore worth iron ore from 112 traders in Bellary. Mr. Andrews and Mr. Fernandez probed further. In a letter dated February 25, 2010, to the then Joint Commissioner of Commercial Taxes S.K. Naikar, Mr. Andrews said the Gujarat-based Gallant Metal Ltd. had initially claimed that it received ore worth Rs. 86.54 crore between 2005 and 2010. When he checked the firm's balance sheet for the same period, however, he discovered that it had actually received Rs. 289.57 crore worth of ore from Bellary. Similarly, SAL Steel Ltd. had submitted that it had received ore worth Rs. 11.39 crore from Bellary, but in their books of accounts it was found that the firm had received ore worth Rs. 250 crore. Mr. Andrews, in his letter, complained that many firms in Gandhidam did not cooperate with his investigation. He named a senior Deputy Commissioner of Commercial Taxes in Gandhidham as not having assisted his inquiry at all. Firms cease Mr. Andrews tried to trace the firms in Bellary that had supplied ore to Gujarat, only to discover that most had ceased to exist. The one firm that was still operational was Vijaya Leasing Company, owned by Dushyant Reddy, brother-in-law of late Andhra Pradesh Chief Minister Y.S. Rajashekhar Reddy. His letter says he was forced to leave the premises within an hour of his visit to the firm on July 23, 2009. In a letter to his immediate superior, Joint Commissioner of Commercial Taxes (Enforcement) A.K.Y. Syed dated July 30, 2009, Mr. Andrews has narrated what happened. It illustrates why the former Lokayukta N. Santosh Hegde referred to Bellary as a republic of the mining mafia, led by the Reddy brothers. (see box: The Republic of Bellary) Two days after receiving Mr. Andrews' letter, Mr. Syed wrote to the Commissioner of Commercial Taxes Pradeep Singh Kharola, calling his attention to large-scale VAT evasion by firms in Bellary, including Vijaya Leasing. He told him that Mr. Andrews had been "intimidated" and was not allowed to inspect the books of Vijaya Leasing. He asked Mr. Kharola for support to obtain documents such as forest permits and Form 26 (filed by mine owners with the Department of Mines and Geology). Mr. Kharola did not reply, nor did he respond to The Hindu's request for his views. Mr. Andrews had evidence of ore being supplied to sponge iron and steel factories in Sholapur and Kolhapur in Maharashtra, and in Goa. Despite requests, he was not given permission to investigate the factories. Departmental inquiry Mr. Andrews is now facing a departmental enquiry for "not completing the investigation" into VAT evasion by iron ore dealers in Bellary. Till its completion his promotion, which was due in November 2012, has been put on hold. When contacted, he too refused to comment on the case. The then Commissioner of the Department Yogendra Tripathi did not respond to questions emailed by The Hindu on August 31, 2012. A senior tax official, who spoke to The Hindu on Mr. Tripathi's behalf in September 2012, dismissed the documents showing large iron ore supplies to Indian firms as "speculative bogus", reiterating that the scam was triggered by overseas demand. "There was no domestic demand, supply or production those days," he said. The Steel Ministry's projections were, however, just the opposite. "The Indian steel industry had entered into a new development stage from 2007-08, riding high on the resurgent economy and rising demand for steel," its website notes. This period saw a "rapid rise in production" with India becoming the "fourth-largest producer of crude steel and the largest producer of sponge iron in the world". At two per cent of its total value, the 220 million tonnes of ore supplied to Indian firms should have fetched the Commercial Tax Department revenues of nearly Rs. 2,000 crore as VAT. The bureaucrat who spoke on behalf of Mr. Tripathi said only about Rs. 50 crore was collected between 2006 and 2010 as VAT from the domestic sale of iron ore originating in Bellary. He said taxes lost in Karnataka could have been recovered in the form of Central Sales Tax paid by manufacturers at every stage of value-addition. This argument, however, does not absolve the Commercial Tax Department for their laxity in collecting taxes. Correction Owing to unforeseen production problems, several errors occurred in the graphic that accompanied Monday's story titled ‘Mining scam keeps getting bigger'.

The Hindu, 17 June, 2013, http://www.thehindu.com/news/national/karnataka/following-the-domestic-iron-ore-trail/article4823969.ece?homepage=true

Tagged with: Mining Corruption

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