Subhas Chandra Pattanayak

Unless he obliterates an illegal order of the Managing Director of Orissa Forest Development Corporation (OFDC) forthwith, there shall be enough ground to suspect that Chief Minister Naveen Patnaik himself is involved with a scam in Kendu leaf trade involving around Rs. 60 Crores.

Kendu leaf (KL) scam is not new in Orissa. Many a Chief Ministers have been scandalized over KL. Orissa’s political climate has faced many traumatic upheavals due to corruption at Chief Minister Level in the matter of KL trade and license. There are instances of use of fair sex to net in Chief Ministers to their clutch by KL traders. The issue, at a point of time, was so sensitive that a Judicial Commission of Enquiry had to deal with it. So, Orissa is habituated with scandals over KL. And, that too, involving Chief Ministers.

At the present juncture, the portfolio of forest is being handled by the Chief Minister himself. And thus the OFDC is under his direct control.

The Managing Director of the OFDC is answerable to him and acts under his direction. Undoubtedly he is his choice.

Such an order has been issued by the MD that could never have been possible without active but clandestine instruction of the CM.

What is the order? What has he done?

He has killed the Orissa Forest Development (Tax on Sale of Forest Produce by Government or OFDC) Act, 2003 to ensure that the KL merchants get benefit worth several crores of Rupees.

The Act under Section 3 stipulates:

(1)There shall be levied and collected, on and after commencement of the Act, a Forest Development Tax (FDT) on every sale of Forest Produce (FP) from the purchaser, at such rate, not exceeding twenty per centum of the sale price of such produce sold to him, as the Government may, by notification, fix in that behalf, and different rates may be fixed for different Forest Produce.
(2) The FDT levied and payable under this Act shall be in addition to and not in lieu of any tax levied and payable in respect of the sale or purchase of the same under the Orissa Sales Tax Act, 1947 or any other Law for the time being in force.

This Act was a necessitated to alleviate the anxiety of the people of Orissa over loss of its forest wealth due to mismanagement. It was necessary not only to exploit but also to develop the forests. A group of environmentalists had apprised the Governor on the occasion of World Environment Day on 05 June, 2003 of possible precipitation of desert (Subhas Chandra Pattanayak:Orissa Cares Little for Similipal Project, Hindustan Times,27 July 1996) by denudation of the forests and urged upon him to apply his prerogative to guide the Government towards conservation. And the Governor had discussed the matter with the Chief Minister. Then it was thought of building up a Fund for exclusive use in development of forests. It was decided to collect a specific tax from FP purchasers as a part of compensation against the loss caused to the Forests through exploitation, the benefit of which they enjoy. Thus took birth the concept of FDT. The issue was so urgent that the above provisions were formulated and enforced through an Ordinance on 18 July 2003 in promulgating which the Governor had underlined that “Circumstances exist which render it necessary for him to take immediate action for the levy and collection of FDT on sales of the FP”. The Ordinance was enforced at once and later the Assembly adopted it into Act 18 of 2003. Following its enforcement with effect from 18 July 2003, as required under Section 3 (1), the Government fixed the FDT on Kendu Leaf at 16 % over and above the existing rate of Orissa sales Tax / Central Sales Tax.

It is surprising and shocking that the MD of OFDC has now obliterated this Tax by promulgating a Notification which is a clear case of killing of the beneficial Act behind back of the Governor as well as the Legislature.

The State is set to suffer a financial loss of not less than 60 crores of Rupees by killing of the FDT. Over and above the direct loss on the current lots, on which auction is to commence from 23 August 2006 till completion, this order of the MD will weaken the position of the State before the Orissa High Court where around a hundred cases are pending in the matter of FDT.

Chief Minister Naveen Patnaik cannot plead ignorance. The auction is to start on 23 August 2006. The Governor should also not sit idly in this matter. He must not allow the Act, adopted by the Assembly and enforced by him, to go inconsequential by a Notification issued by a MD of a public sector corporation.

It cannot be countenanced that a notification overrides a Legislative Act. That too, to the total disadvantage of the State.

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