The Commission for Investigation of Abuse of Authority (CIAA) on Thursday sought a bail amount of Rs3 billion from Chudamani Sharma, suspended director general of Inland Revenue Department (IRD).

It is the highest ever bail amount sought by the CIAA from any individual facing probe from the anti-graft body. If Sharma deposits the bail amount, he would be released from the CIAA custody. However, CIAA officials said investigation on Sharma will be continued even after his release.

On June 2, the CIAA had arrested Sharma on charge of misappropriating revenue and settling taxes in a questionable way.

The anti-graft has been interrogating Sharma since last 27 days for revenue embezzlement and tax settlement in a dubious way through the Tax Settlement Commission (TSC).  

The anti-graft body has claimed to have established embezzlement of  Rs9 billion while exempting taxes to various enterprises through the Tax Settlement Commission (TSC). It has sought a  third of the embezzled amount from Sharma, a member of three-member team.

The TSC was established in February 2015 under the chairmanship of chartered accountant LD Mahat when Sharma and Umesh Dhakal were its members. The anti-graft body has also issued arrest warrants to TSC Chairman LD Mahat and member Umesh Dhakal after they failed to turn up before the anti-graft body to record their statements.

According to the CIAA officials, they have unearthed financial embezzlement of over Rs9 billion by the officials of the TSC while exempting taxes to various enterprises.

Sources at the anti-graft body told the Post that embezzlement over Rs9 billion has been established while probing around 120 files containing higher amount of tax exemption. The anti-graft body has been probing into over 1,000 files related to tax waiver by the TSC. "The amount of irregularities could be much higher when all the files are probed," said a highly placed source at CIAA. 

The act of the TSC had courted controversy after a report of the Office of the Auditor General in April questioned the Rs21 billion tax exemptions granted to various enterprises.  

The CIAA investigation shows the TSC had given tax waiver even to the enterprises that were seeking to pay the tax dues. "Even those who had missed registering applications within the set deadline for settlement of due taxes, were also given tax waiver by keeping prior date of deadline for application," said the CIAA source.