Two Biratnagar-based industrial firms have been accused of evading billions of rupees in taxes by producing fraudulent documents to hide the exact number of financial transactions and profit.

The Inland Revenue Office in Biratnagar issued an order last week against Awanish Agrivet Industries and Om Saibaba Crusher Industry stating that they evaded about Rs3.72 billion in taxes. Both firms are jointly owned by Ashok Kumar Murarka and Krishna Prasad Prasai.

A source at the revenue office informed the Post that Awanish Agrivet and Om Saibaba Crusher Industry evaded Rs2.38 billion and Rs 1.34 billion in taxes, respectively. The amounts include VAT, income tax, interests and penalties.

Om Saibaba Crusher and Awanish Agrivet had registered with the VAT office in 2003 and 2004, respectively. Both firms were found to be evading taxes by showing fewer transactions in their books of accounts till the fiscal year 2014-15.

The incident of tax evasion came to light following the dispute between business partners Murarka and Prasai. According to the source at the revenue office, Prasai had lodged a complaint at the office against Murarka a few months ago with ‘substantial’ evidence. He handed over a computer hard disk and a balance sheet that confirmed under-invoicing was a common practice at the firms. Murarka, as Prasai claimed, used to sell sand and pebbles without issuing VAT invoices.

On May 2, the Inland Revenue Office issued a preliminary tax determination order requiring the two firms to furnish their financial reports within 15 days. However, Murarka filed a petition at the Supreme Court on May 15 through liquidator Dilip Nairam Singh, demanding a writ of certiorari to scrap the preliminary tax determination order. A single bench of Justice Manoj Kumar Sharma on Wednesday refused to issue an interim order and instead issued a show cause notice against Awanish Agrivet Industries and Om Saibaba Crusher Industry. The court also ordered the tax office to continue investigation.

“After Wednesday’s court order, we have instructed the firms to furnish their final tax calculations,” said DB Chhetri, chief at the Inland Revenue Office in Biratnagar. He claimed the office determined taxes on the basis of evidence and facts collected by the revenue office. According to him, industrialists can appeal to the director general of the Inland Revenue Department if he/she is not satisfied with the taxes determined.