The Commission for Investigation of Abuse of Authority (CIAA) could issue an arrest warrant against Tax Settlement Commission (TSC) Chairman LD Mahat and member Umesh Dhakal on Thursday after they failed to turn up before the anti-graft body on Wednesday—the deadline set by the body.

 The anti-graft body had summoned them as part of its ongoing investigation into tax exemption to various organisations. A large-scale financial embezzlement has been suspected while exempting taxes to different business enterprises.

The CIAA has learnt that Mahat is currently out of the country for “treatment” purpose. Dhakal was not home when the anti-graft body delivered its summons on Sunday.

“As they didn’t appear at the CIAA by Wednesday evening, the next legal step is to issue a warrant against them,” said a CIAA source. “We can take this step on Thursday.”

The CIAA has already arrested Chudamani Sharma, the director general of the Inland Revenue Department (IRD) and also a member of the TSC.

Based on the interrogation with Sharma, the anti-graft body has gathered around 1,000 files from the IRD of which 120 has been investigated, according to CIAA sources. 

The investigation has already established irregularities of over Rs800 million, a CIAA source said. “We had demanded the files before Sharma’s arrest but the IRD didn’t cooperate,” the source added. “We have been able to receive several files after his arrest.” 

The CIAA had taken Sharma under control at first considering that he could destroy evidence.

Investigating officials said that the initial probe suggested that the scale of corruption could well be the biggest in the country’s history. The TSC, formed in February 2015 by then finance minister Ram Sharan Mahat, had courted controversy after a report of the Office of the Auditor General in April called into question the Rs21 billion tax exemption granted to various enterprises.

Meanwhile, the Finance Committee of Parliament is meeting on Thursday to discuss the alleged irregularities while settling taxes through the TSC. The committee has asked finance minister, finance secretary, among other concerned officials, to present at the meeting.

The House panel will not go into the investigation being carried out by the CIAA, 

but instead try to find out the reason behind TSC’s formation and its decision for extending tax exemptions at large scale, committee Chair Prakash Jwala said. “This will help us determine whether legal reforms are needed to avoid tax exemption in the future.”