Setia's suspension order was issued after chief secretary Rakesh Singh approved the department's recommendation in this regard.
"Setia failed to discharge his duty to check plying of illegal buses in Amritsar district. This amounted to grave indiscipline, and taking a serious note of it, the Punjab government has decided to place him under suspension with immediate effect," the government said in an official statement.
"We will take strict action against officers who indulge in dereliction of duty during this drive of recovering tax from transporters," said a department functionary, refusing to be identified. "The message from the DTO's suspension is loud and clear to those whose functioning has not been up to the mark," he added.
At a recent meeting, sources say, deputy chief minister Sukhbir Singh Badal had directed the department to act tough against private bus operators who had been evading tax.
"Sukhbir even directed to impound the buses of his transport companies first if they have not deposited tax," an officer said.
There are about 6,000 stage carriage private buses across Punjab.
Encouraged by such an explicit direction from Sukhbir - who is not the transport minister but closely monitors the department's functioning, apparently due to high stakes in the transport business the department launched the drive on November 22 and challaned and impounded the buses of a Haryana politician close to the Badal family.
"We let off the buses of this Haryana politician after recovering the due tax," a source said.
According to official records, in the past two weeks, 101 stage carriage buses registered in Punjab were impounded across the state.
"This drive fetched Rs. 2.65 crore as motor vehicle tax. Now, we have recovered 80% of the arrears from the defaulters. But the drive will continue," secretary, transport, Mandeep Singh told Hindustan Times.
Of the impounded buses, 23 are still in the department's custody.
Department functionaries have also tightened the noose around tourist/sleeper coach buses registered outside Punjab and operating illegally in the border state without paying tax. As per records, between November 22 and December 3, 153 tourists buses were challaned and 94 impounded.
From this initiative, the government recovered Rs. 17 lakh as tax from the tourist buses.
In yet another tax collection drive, launched with the help of the police at the nine inter-state check posts, bordering Haryana and Rajasthan, the department collected Rs. 30 lakh as tax from goods transporting vehicles in the past two weeks. During the corresponding period last year, just Rs. 12 lakh were collected.
Behind this pro-active tax recovery drive is the Rs. 864 crore revenue generation target the government has set for the transport department for the 2012-13 financial year.
"We hope not only to meet the target but also go past Rs. 1,100 crore. Defaulters will have to pay tax," Mandeep Singh said.