The Directorate of Revenue Intelligence (DRI) is seeking to resume its inquiry into allegations of the Adani Group overvaluing coal imports, as reported by Reuters. The DRI has approached the Supreme Court for permission to gather evidence from Singapore.
In 2016, the tax intelligence agency had issued a circular, asserting that Adani Group companies were under investigation for artificially inflating coal imports from Indonesia. The alleged motive was to divert funds overseas and obtain higher compensation for power tariffs.
According to the agency’s claims, coal shipments from Indonesia were purportedly imported directly to India but initially billed at inflated prices at the Adani Global Pte unit in Singapore. Since 2016, the agency has been attempting to obtain transaction documents related to the conglomerate’s Singapore dealings through letters rogatory.
Letters rogatory are formal requests made to foreign countries to seek judicial assistance in investigating offshore entities. In October 2019, the Bombay High Court dismissed all letters rogatory following an appeal by the Adani Group. However, the Supreme Court, in January 2020, stayed the High Court’s order without quashing it.
Further, the Apex Court issued an interim stay on the Bombay High Court Judgment which quashed the Letters Rogatory issued by the Directorate of Revenue Intelligence to tax authorities in Singapore, UAE, Hong Kong, and British Virgin Islands in order to seek information on the transactions concerning purchase and sale of Indonesian coal by subsidiary by Adani Enterprises Ltd and Adani Power ltd., companies of Adani group.
The bench observed that the Bombay High Court by its Bench composed of Justices B. Dangre and R.V. More without going into the merits of the petition had held in favour of the respondents on the ground that the DRI’s commencement of investigation into a non-cognizable offence without following the procedure mandated under section 155(2) wherein the permission from the Magistrate has been prescribed cannot be sustained and hence stood quashed.
Read More: Supreme Court stays HC Judgment quashing Letters Rogatory seeking information against Adani Group
Notably, the DRI is also examining other conglomerates, including the Anil Dhirubhai Ambani Group and Essar Group, for alleged overvaluation of coal imports.
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