This is the largest ever corruption case filed by the anti-graft body so far. TSC Chairperson Lumba Dhowj Mahat and members Chudamani Sharma, the suspended director general of the Inland Revenue Department (IRD), and Umesh Prasad Dhakal have been charged with large-scale revenue embezzlements in the name of exempting taxes through the TSC formed in February 2015.

 

The CIAA arrested Sharma on June 2 while the two others are at large. The anti-graft body has issued arrest warrants against them. The penalties were proposed according to clauses 3 and 7 of the Corruption Prevention Act-2002.

 

Citing clauses 3 (1) and 3 (1i), the CIAA has sought to recover the embezzled amount, besides slapping 8 to 10 year jail terms. According to Clause 7 of the Act, fines double the embezzled amount have been sought, in a practice applicable for government staffers.

 

According to Khagendra Prasad Rijal, assistant spokesperson for the CIAA, the embezzled amount is shared between the three. “As each will be fined double the shared embezzled amount, each will have to pay a total of Rs10.02 billion,” he said. It means the CIAA proposes to recover Rs30.06 billion from the three TSC members in total.

 

Although the CIAA started the process for filing the case on Thursday, it took two more working days since Sharma was presented before the Supreme Court in a habeas corpus petition filed by his wife Kalpana Upreti Sharma.

 

“We asked the CIAA to keep him in custody on Sunday and present him to the court on Monday,” said Jagannath Poudel, spokesperson for the Special Court. The apex court will continue its hearing on the habeas corpus writ on Monday.

 

According to CIAA, the chargesheeted amount was a fraction of possible embezzlement as only 45 of the 1,069 related files have been studied. More embezzlement could be found once all the files are probed. “We will file separate or supplementary cases if additional embezzlement is established,” said Rijal.

 

Of the total tax exemption files, 690 were related to enterprises that had refused to pay their dues. The exemption has rewarded the tendency for refusing to pay taxes, the anti-graft body said.

 

According to the CIAA, the TSC exempted taxes for those who had agreed to pay the amount. It accepted the applications of the firms that produced fake VAT bills a few years ago. The taxes were settled even in cases being considered at the Revenue Tribunal.

 

Applications registered after deadline were also accepted by assigning prior dates. In another instance, the value added tax raised by traders from the public was exempted.

The CIAA launched its probe after the Auditor General’s Office raised questions over tax exemption in its annual report in April. “After Sharma refused to hand over files related to tax exemption twice, he was arrested in a third attempt,” said Rijal.