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Economic and Revenue Sector, Government of Maharashtra Report of the Comptroller and Auditor General of India on Economic and Revenue Sectors for the year ended March 2019 Government of Maharashtra Report No. 2 of the year 2020 Report of the Comptroller and Auditor General of India on Economic and Revenue Sectors for the year ended March 2019 GOVERNMENT OF MAHARASHTRA Report No. 2 of the year 2020 Table of contents TABLE OF CONTENTS Reference Paragraph Page Number Number Preface vii Overview ix - xiii PART-A : ECONOMIC SECTOR CHAPTER-I : INTRODUCTION About this report 1.1 1 Audited entity profile 1.2 1 Authority for audit 1.3 2 Organisational structure of the offices of the Principal Accountant General (Audit)-I, Mumbai and the 1.4 3 Accountant General (Audit)-II, Nagpur Planning and conduct of audit 1.5 3 Responsiveness of Government to Audit 1.6 3 CHAPTER II : PERFORMANCE AUDIT Public Works Department Construction and maintenance of bridges in Maharashtra by Public Works Department and 2.1 7 Maharashtra State Road Development Corporation CHAPTER III : COMPLIANCE AUDIT Co-operation, Marketing and Textile Department Thematic Audit on ‘Tur procurement and disposal under Market Intervention Scheme of Government 3.1 37 of Maharashtra for Kharif season 2016’ Public Works Department Inadmissible payment of ` 97.65 lakh due to non-compliance of condition for additional cost of 3.2 46 16.50 per cent Absence of inter-department compliance system 3.3 48 resulting in inadmissible payment of ` 75.40 lakh Arbitrary withdrawal of part works from one contractor and awarded to another contractor at higher rate without inviting tender resulted in avoidable 3.4 49 expenditure of ` 2.86 crore besides vitiating transparency in the award of work Water Resources Department Execution of height raising work of dam of Anjani medium project without acquiring the required land for submergence and non-assessment of economic viability 3.5 50 of the entire project resulted in wasteful expenditure of ` 32.38 crore iii Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019 Wasteful expenditure ` 4.38 crore due to commencement 3.6 52 of the work without acquisition of land Injudicious planning resulted in unfruitful expenditure of ` 117.58 crore due to stoppage of work of LIS for more 3.7 53 than three years Deficient planning resulting in unfruitful expenditure of ` 55.22 crore on uneconomical Unkeshwar high level 3.8 55 barrage Avoidable extra payment of ` 102.12 lakh due to non-compliance to the guidelines regarding 3.9 56 design/revised design procedure of canal Failure to comply with prescribed norms resulted in incorrect/defective estimation and excess expenditure of 3.10 58 ` 2.15 crore under clause 38 PART-B : REVENUE SECTOR CHAPTER-IV : GENERAL Trend of revenue receipts 4.1 61 Analysis of arrears of revenue 4.2 65 Arrears in assessment 4.3 66 Evasion of tax detected by the department 4.4 67 Response of the Government/departments towards audit 4.5 67 Analysis of the mechanism for dealing with the issues 4.6 71 raised by Audit in the Home department Audit planning 4.7 73 Results of Audit 4.8 73 CHAPTER V : TAXES ON SALES, TRADE, etc. Tax administration 5.1 75 Internal audit 5.2 75 Results of Audit 5.3 76 COMPLIANCE AUDIT Erroneous allowance of dual credit of interest 5.4 77 Short levy of tax due to irregular allowance of inter-state 5.5 78 sales at concessional rate Non-levy of penalty under section 61(2) of Maharashtra 5.6 79 Value Added Tax Act 2002 for late filing of audit report in Form 704 Non/short levy of interest under section 30(2) of 5.7 80 Maharashtra Value Added Tax Act 2002 CHAPTER VI : STAMP DUTY AND REGISTRATION FEE Tax Administration 6.1 83 Internal audit 6.2 83 Results of Audit 6.3 83 iv Table of contents PERFORMANCE AUDIT Preparation of Annual Statement of Rates for 6.4 85 determination of market value for levy of stamp duty and registration fee COMPLIANCE AUDIT Short levy of stamp duty due to undervaluation of 6.5 109 property Short levy of stamp duty in conveyance deed due to 6.6 115 incorrect application of provisions of MS Act and ASR Short levy of stamp duty in cases of lease deed 6.7 118 Short levy of stamp duty due to non-impounding of 6.8 120 instrument Short levy of stamp duty due to non-consideration of 6.9 122 distinct matters in one instrument and non-application of instructions to ASR Short levy of stamp duty due to irregular grant of 6.10 124 remission of stamp duty CHAPTER VII : LAND REVENUE Tax administration 7.1 127 Results of Audit 7.2 127 FOLLOW UP AUDIT Follow-up audit of performance audit on ‘Sale/allotment 7.3 129 of land and levy and collection of conversion charges’ COMPLIANCE AUDIT Short recovery of unearned income 7.4 133 Short levy of occupancy price due to application of 7.5 137 incorrect rates Short recovery of nazarana 7.6 138 Short levy of royalty and penalty on illegal extraction of 7.7 140 clay for bricks due to incorrect calculation APPENDICES Appendix Page Details Number Number Department-wise outstanding inspection reports/ paragraphs issued up to December 2018 but outstanding 1.1 143 as on 30 June 2019 Statement showing number of paragraphs/reviews in respect of which explanatory memoranda not 1.2 144 received Department wise position of Public Accounts Committee recommendations on which Action Taken Notes were 1.3 145 awaited Organisational structure of Public Works Department and 2.1 146 Maharashtra State Road Development Corporation List of selected circles and divisions 2.2 148 Inadmissible payment of ` 75.40 lakh to contractor for 3.1 149 transportation of fly ash at site v Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019 Excess payment of ` 102.12 lakh to contractor due to 3.2 150 faulty estimation Statement showing excess expenditure due to incorrect 3.3 151 estimate Organisational structure- Registration & Stamp Duty 6.1 152 Non-framing of separate value zones due to non-analysis 6.2 153 of sales data (A), (B), (C) Non-framing of separate value zones due to non-analysis 6.3 154 of sales data (Jt.SR Kalyan 5) Value zone maps not updated 6.4 154 Details of cross verification of MRSAC map and ASR 6.5 155 Statement showing increase in ASR for the year 2014 6.6 156 Statement showing increase in ASR for the year 2015-16 6.7 157 Statement showing increase in ASR for the year 2016-17 6.8 157 Statement showing increase in ASR in spite of decrease 6.9 158 in rates in previous years Method of depreciation 6.10 159 Lack of uniformity in calculation of depreciation 6.11 161 Lack of uniformity in increasing land rate TDR potential 6.12 162 Incorrect method of calculating consideration in case of 6.13 163 development agreements for sharing of built up area Incorrect method of calculating consideration & market value in case of development agreements for sharing of 6.14 166 sale proceeds Impact of use of additional FSI & TDR on increase in rate 6.15(A) 167 of land in Mumbai region Impact of use of additional FSI & TDR on increase in rate 6.15(B) 171 of land in rest of Maharashtra Incorrect method of calculating consideration & market value in case of development agreements for sharing of 6.16 173 built up area Incorrect method of calculating market value in 6.17 174 development agreement for sharing of sale proceeds Inadequate provision in the circular dated 30 June 2018 6.18 175 for valuation of special township Impact of valuation of reserved land 6.19 176 Lack of uniformity in valuation guidelines for calculation of market value for big township situated in influence 6.20 177 zone/Pune Metropolitan Region Development Authority Revenue sharing before 2015 6.21 178 Revenue sharing on or after 2015 6.22 179 vi P r e f a c e This report of the Comptroller and Auditor General of India for the year ended 31 March 2019 has been prepared for submission to the Governor of the State of Maharashtra under Article 151 of the Constitution of India. This report relates to audit of the economic and revenue sectors of the Government departments conducted under the provisions of the Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971 and Regulations on Audit and Accounts, 2007 issued thereunder by the Comptroller and Auditor General of India. This report is required to be placed before the State Legislature under Article 151 (2) of the Constitution of India. The instances mentioned in this report are those, which came to notice in the course of test audit for the period 2018-19 as well as those which came to notice in earlier years, but could not be reported in the previous audit reports; instances relating to the period subsequent to 2018-19 have also been included, wherever necessary. The audit has been conducted in conformity with the Auditing Standards (March 2017) issued by the Comptroller and Auditor General of India. vii Overview OVERVIEW This report comprises of two sections (i) Economic Sector and (ii) Revenue Sector. There are seven chapters containing two performance audits, a follow-up audit and 24 compliance audit paragraphs. Chapter I to Chapter III contain audit findings pertaining to economic sector including one performance audit on “Construction and Maintenance of Bridges in Maharashtra by Public Works Department and the Maharashtra State Road Development Corporation” and one thematic audit on “Tur procurement and disposal under Market Intervention Scheme of Government of Maharashtra for Kharif season 2016”.
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