IT sleuths beat liquor retreat

HYDERABAD: Under pressure from the top echelons of the government, the income-tax (IT) department has eased the pressure on a majority of liquor licence applicants who had mobilised large amounts of unaccounted money to bid for the contracts. The department had anticipated windfall tax collection of Rs 200 crore by bringing this money—said to be of the order of Rs 2000 crore—under tax scrutiny.But now it may have to be content with bagging a mere Rs 20-30 crore. Sniffing an opportunity in the liquor bids, the IT department had intercepted the money trail and prevailed upon banks not to process the demand drafts that were returned to licence applicants them after the bidding process came a cropper in the High Court. Running scared from the tax men, the liquor cartels allegedly persuaded the chief minister and a couple of Union ministers from the state to lobby Union finance minister P Chidambaram. Thereafter, 'suitable' instructions were sent down to the state's tax authorities, who issued orders on Tuesday to let off from scrutiny applicants who had furnished demand drafts for less than Rs 10 lakh. But that would let most of the fish escape the tax net, for 95 per cent of the bidders had taken care to furnish multiple bonds, all worth less than Rs 10 lakh. Very few applicants had submitted bonds of higher denominations.