WE THE PEOPLE
While selling timber for Rs 169 crores through auction, SFC has failed to recover Rs 16.87 crores earnest money from bidders
Hence people urge concerned authorities to adhere to prescribed Auction guidelines and achieve targets without any laxity
By: M. Shirjeel
Srinagar: The Corporation conducts sale of timber through auction and transfers timber to the State Forest Department for sale to consumers. The Corporation reduced the targets from 42 lakh cfts in 2003-04 to 35 lakh cfts in 2004-05 and further to 25 in subsequent years. It failed to achieve even the reduced targets and during the period 2003-04 to 2006-07, there was shortfall in achievement of targets ranging between 19 and 39 per cent. Reasons for lowering of targets and shortfall in achievements have not been spelt out by the concerned despite required by the audit on spot.
Pertinent to mention that most of the timber extracted by the Corporation is sold through auction. The auction procedure, interalia provides that the successful bidder shall deposit Earnest Money Deposit (EMD) equivalent to 10 per cent of the bid amount on spot. The Auctioning Authority can, however, allow earnest money to be deposited within two days following the date of auction. In case the successful bidder fails to deposit the EMD within the specified period, the bidder is deemed to have withdrawn from the auction process and the amount, if any, deposited by him as part of EMD is forfeited and the Corporation has the right to re-auction the timber.
But it has been noticed that the Corporation (East and the West Marketing Division, Jammu) sold timber for Rs. 168.70 crore during 2001-07 through auction. However, in none of the cases the Corporation had recovered EMD to the tune of Rs. 16.87 crore from the bidders on spot.
It has, however, been observed that Corporation had not only failed to identify such officers but had continued auctions without recovery of the EMD, which was not only in disregard to the directions of the COPUC but also in violation of prescribed terms and conditions.
As per J&K General Sales Tax Act, 1961, the Corporation was liable to pay purchase tax at 8.4 per cent (12.6 per cent from 1999-2000) on the stocks of timber transferred by it to the Pathankot sale depot. Accordingly, the Sales Tax Department assessed (1997-2007) the Corporation for payment of Purchase Tax of Rs. 10.04 crore for timber (valued at Rs. 80.02 crore) supplied by the Corporation to the sale depot Pathankot during 1997-2004. The Corporation filed writ petition in December 1997against the assessment order in the High Court, in response to which the Court directed the State Government in December 2001to decide the matter at its own level. The State Government held the Corporation liable for payment of the tax. Consequently, the Corporation paid Rs. 9.75 crore to the Sales Tax Department during April 2004 to August 2007.
It was observed that even after the High Court decision of December 2001, no undertaking for payment of Purchase Tax was taken from the buyers subsequently to safeguard its interests. It, however, expressed its inability to recover the tax from the buyers to whom stock had been sold/auctioned prior to March 2004.
In accordance with the conditions laid down in the auction notice, the Corporation allows rebate at rates, in case successful bidders make payments within the stipulated period. Payment made within 14 days from the day of auction is 9.5 per cent,11 Per cent for three months between January and March 2004. Payment made from 15th to 21st day of the auction being 5 per cent and payment made within 28 days of the auction is 3 per cent.
Beyond 28th day, there is no rebate.
It is startling to learn from the scrutiny of records of the East and West Marketing Divisions of Jammu that despite the bidders making payment after 15 to 28 days of the auction, the Corporation allowed (2001-2007) rebate at the higher rate of 9.5 per cent (11 per cent) 5 per cent, instead of at 5 and 3 per cent as admissible. This resulted in payment of excess rebate of Rs. 9.71 lakh in 59 cases with consequential loss of the Corporation.
Hence people urge concerned authorities to adhere to prescribed Auction guidelines and achieve targets without any laxity. The Corporation can become vibrant if set procedures are followed both in letter and spirit.
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