CBI has booked three officials of the Port Blair Municipal Council (PBMC) for alleged corruption in issuing around 252 no-dues certificates to hotels and bars without recovering interest on outstanding property tax, causing an estimated loss of Rs 2.08 crore to the public exchequer.

According to a First Information Report (FIR) registered by the Central Bureau of Investigation’s Anti-Corruption Branch in Port Blair on September 29, a former revenue officer of PBMC, an ex-assistant revenue officer, and an ex-tax inspector have been booked.

The central agency registered the FIR after a preliminary inquiry. The inquiry examined alleged irregularities in the issuance of no-objection certificates and no-dues certificates by PBMC’s revenue section between 2020 and 2023.

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“The revenue section of PBMC was responsible for collecting revenue, including property tax, market rent and water charges. After the abolition of octroi and the introduction of GST, property tax became one of the main sources of revenue for the municipal body,” the FIR said.

The FIR refers to a 2015 order of the Calcutta High Court’s Circuit Bench at Port Blair, which permitted the council to adopt a new methodology for assessing annual rental value under municipal regulations. The PBMC later passed a resolution in December 2016 to implement the unit area method for property tax calculation, followed by a public notice in January 2017.

However, the FIR alleges that the PBMC took no further effective action to interpret and implement the High Court’s order. It further alleges that property tax files were maintained separately for each taxpayer and that calculation of outstanding principal and interest had been pending since 2011.

Procedure not followed

The agency alleges that hotel and bar owners entered into a criminal conspiracy with municipal officials to avoid paying the interest portion of outstanding property tax.

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According to the FIR, around 252 no objection certificates were issued to hotel and bar owners between 2020 and 2023. “Such certificates were issued to 32 hotels and bars even though Rs 2,08,55,880 in interest was allegedly pending from them on the dates the certificates were issued,” the FIR alleged.

The CBI alleges that the tax inspector calculated the outstanding dues and, despite the interest remaining unpaid, recommended issuing no dues certificates. It further alleges that the assistant revenue officer also recommended such certificates, while files maintained by the revenue officer showed instances where the chief account officer had not approved them.

According to the FIR, the chief account officer was the competent authority for approving no objection certificates and no dues certificates, while the revenue officer was delegated only to sign such certificates on behalf of PBMC’s secretary.

The FIR said the relevant files were not placed before the chief account officer and approvals were granted at the level of the revenue officer in violation of rules.