Corruption: The Office of the Attorney General (OAG) yesterday pronounced it was “baseless and unreasonable” for Jatan Prasad Lalchand Prasad (JPLP), the defendant, to challenge the locus standi of Anti-Corruption Commission (ACC) and OAG.

OAG argued the commission had the authority to investigate the tax matter, while OAG also had the locus standi to undertake prosecution. Further, it has asked to convict the defendants, JPLP proprietor Lalchand Prasad and the departmental store’s data entry operator Rajeshwar Choudaury.

The OAG also asked the court to order the defendant, Lalchand Prasad to provide substantive figures of the alleged tax liability, failing which the court must order the defendant to restitute Nu 184.90 million.

This rebuttal comes following the opening statement made by the defendant’s legal counsel early last month asking the Phuentsholing dungkhag court to dismiss the case against him for want of proper “locus standi” from the OAG.

The defendant had then asserted in his statement that OAG did not have basis to prosecute for the commission on this tax matter. The defendant had pointed out provisions of the Income Tax Act of Bhutan (ITA), 2001.

Bringing the Anti-Corruption (AC) Act, 2011, and OAG Act, 2015, the OAG refuted claims raised by the defendant.

Elaborating the commission’s investigation on the tax matter, OAG mentioned the defendant, “despite knowing his duties and liabilities to file the tax return, had knowingly and willfully under-reported income and over-estimated expenses solely to evade the taxable income.”

“This willful act was not discovered by the regional revenue and customs office (RRCO) in Phuentsholing,” the OAG statement revealed and explained “it was also the reason that JPLP intentionally and purposely evaded the taxable income with the help of two software systems, which were beyond the means of RRCO to undercover the modus operandi of the defendant to evade tax.”

OAG further declared that relevant sections of the Act, 2011 had provision that can “receive and consider any complaints of the commission of an offence under this Act lodged with it by a person or authority and investigate such of the complaints as the commission consider practicable.

In addition, OAG made it clear that ACC could commence an enquiry or investigation on its own motion even without a complaint and without informing any person or authority.

The OAG also mentioned that JPLP’s concealment of taxable income was a sole discovery made by the commission and not by RRCO in Phuentsholing.

The defendant would have the right to challenge commission’s investigating power only if the commission had took over the investigation from RRCO. The defendant in such case would have the right to challenge on the grounds of “misuse of authority or usurp of power” of RRCO by ACC.

Regarding the locus standi of OAG in prosecuting the case, the office stated Section 11 of the OAG Act that in accordance with Article 29 of the country’s Constitution, OAG was the central litigation and prosecuting agency of the government.

“Prosecution of individuals, parties, or organisations on the basis of the findings of the ACC shall be undertaken expeditiously by the OAG for adjudications by the Courts,” the OAG referred.

The OAG also highlighted the skimming, which according to it is a terminology used in accounting to refer to an off-book fraud. In this fraud, the total revenue earned by an entity during the income year is not shown in the books of accounts.

As per the OAG’s statement, JPLP used software each for retail and wholesale. In handling these soft wares, the defendants were able to apply skimming techniques in the store accounts.

Rajesh Rai, Phuentsholing