CAG report notes irregularities in tax payments, vehicle registrations in Bihar

The report notes that while the dealer-point registration system was functional in all the 38 district transport offices in the state, there was still delay in payment of taxes by 488 authorised dealers for 423,897 vehicles

A Comptroller and Auditor General (CAG) audit of Bihar transport departments’ functioning in financial year 2018-19 has revealed several irregularities including absence of mechanism to realise timely payment of taxes and fees from automobile dealers and ensuring vehicles are delivered to customers only after mandatory registration at the dealer-point.

The CAG report points out specific cases of brazen non-compliance by auto dealers in Bihar under the transport department’s watch. (Courtesy- CAG website)

“Delivery of vehicles without registration mark not only compromised the objective of dealer-point registration to ensure... registration mark and immediate realisation of road tax, but also posed a risk as such vehicles can be easily misused for unlawful activities,” the CAG report tabled in the Bihar legislative assembly on July 29, said.

It pointed out that the dealer’s failure to adhere to these rules was due to absence of deterrence or cost attached by the transport department. “Absence of any return, binding obligation as well as deterrent measures for the dealers to ensure delivery of vehicles after assigning registration mark is indicative of the weak control mechanism in the transport department, which led to undue delay in payment of taxes and fees,” the report added.

Central motor vehicle rules 1989 provide that vehicles cannot be delivered without either temporary or permanent registration.

The report notes that while the dealer-point registration system was functional in all the 38 district transport offices in the state, there was still delay in payment of taxes by 488 authorised dealers for 423,897 vehicles for a period ranging from one day to 1997 days (nearly five and a half years).

“Audit verified documents of 2,920 out of 423,897 vehicles as submitted by dealers and observed that all of them were delivered prior to issue of registration mark,” the report said,

The report underlined the grave situation by pointing out specific cases of brazen non-compliance with the rules.

“In Sheohar district, an authorised dealer was found to have delivered 24 vehicles in December 2018 and uploaded required documents for registration in March, 2019 without payment of due tax and without allotment of temporary registration. Allotment of temporary registration at the time of delivery would have also brought additional revenue of ₹3.16 crore to the state government,” the report said.

In its reply, the transport department said that “temporary registration was not a matter of right, instead it was a choice of the vehicle purchaser and hence the department did not levy temporary registration fee”.

The department also argued that after February 2018 vehicles were delivered following the required procedure.

“After implementation of VAHAN-4 (between May 2017 and February 2018), vehicles were delivered only after realisation of due tax and fee and allotment of permanent registration mark. In case of DTO Shehohar, necessary instructions have been issued to remit the amount realised from the dealer,” the department said.

Vahan 4.0 is a web-based software which enables the registration of vehicles online along with e-payment of taxes, fees.

However, the audit did not find the department’s reply tenable, as it didn’t cover why the system was not put in place to ensure timely remittance of tax realised by dealers after its realisation from buyers of vehicles.

The audit report also pointed out that “due to absence of guidelines/supporting documents for registration of tractor and tractor trailer, seven district transport offices (DTO) registered 8,969 tractors or tractor-trailer combinations under agriculture category in arbitrary manner leading to loss of ₹25.22 crore in revenue.”

“In Bhagalpur, no tractor or tractor-trailer has been registered in the commercial category since May 2017, indicating that discretionary powers were misused by the DTOs. On the other hand, in DTOs, in eight of the 15 test checked districts, no tractor was registered in the agriculture category. The department partially accepted it when pointed out and stated that necessary instruction had been issued to all DTOs to obtain certificates from tractor owners at the time of registration about the intended purpose,” the report said.