The hearing on writ petition filed at the Supreme Court (SC) seeking release of suspended director general of Inland Revenue Department Chudamani Sharma has been postponed for Tuesday citing time limitation.

In a joint bench of justices of Cholendra Shumsher JBR and Prakash Man Singh on Monday, government lawyers argued that Commission for Investigation of Abuse of Authority (CIAA) has not breached its jurisdiction by keeping Sharma under custody for investigation.

The Apex Court had postponed the hearing for today after discussions did not end in Sunday’s session.

The Apex Court on July 12 had sought an explanation from the CIAA for keeping suspended IRD director general in custody on a habeas corpus petition filed at the court demanding his release by Sharma’s wife Kalpana Upreti on July 11.

The SC had issued a show cause notice to the CIAA and ordered it to present the accused before the court on Friday.

Claiming Sharma’s detention as illegal, Upreti had argued in the petition that Sharma as the IRD chief is entitled to special rights to raise or slash the tax base and as such the CIAA does not have authority to probe the activities of the TSC.  She has also calimed that the bail amount set by the anti-grant for his release is excessive.

The CIAA had sought Rs3.02 billion bail from Sharma on the charge of misappropriating revenue worth over Rs9 billion. The Special Court had approved the bail money and allowed CIAA to put Sharma in custody until the bail amount was deposited. 

Sharma was arrested by the CIAA on June 2 for his alleged role in exempting Rs 21 billion in capital gains tax to the Ncell in questionable manner through the Tax Settlement Commission (TSC) and has been in custody since. He was the member secretary of the commission formed in February 2015.

Earlier on July 16, the anti-graft body filed a corruption case on Sunday against three members of the Tax Settlement Commission at the Special Court on the charge of embezzling Rs10.02 billion each.

The CIAA investigation shows the TSC had given tax waiver even to the enterprises that were seeking to pay tax dues. Even those who had missed registering applications within the set deadline for settlement of due taxes were also given tax waiver by keeping prior date of deadline for application, according to CIAA officials.

The OAG report has also questioned the intent of the TSC after it gave tax exemption of over 99 percent to many private firms. 

As per Clause 7 of the Corruption Control Act 2002, if a government official is found guilty of corruption, s/he is liable to pay the embezzled amount as well as the double of that in fine. This could mean the CIAA could seek around Rs 11 billion each from the trio in the chargesheet.