Income Tax: Major suppliers of pulses and palm oil to Public Distribution System (PDS) stores in Tamil Nadu were randomly searched by income tax officers.

Approximately 40 locations, largely in and around Chennai, were searched, according to highly placed sources in the Income Tax Department. These locations were linked to Arunachala Impex, Kamatchi & Co, Hira Traders, Best Dhall Mill, and Integrated Service Point.

According to the sources, investigations into each of these companies revealed that they failed to keep accurate records and that they also avoided paying taxes.

“We found that proper accounts were not maintained by these companies. We also suspect that there’s been tax evasion and cash which have not been shown in the accounts. Based on these doubts, as per the IT Act, we have started the searches,” said a senior IT official, who did not wish to be named.

Palm oil is imported mainly from Indonesia and is sold in ration shops as well as in private stores. “We have started the searches and it will go on for a few days, as we need to check all accounts and also question people. Only after the searches are completed will we know the total amount of tax evasion and unaccounted money,” said the IT official.

The Tamil Nadu government has placed a number of contractors on the blacklist, including Arunachala Impex, which was in charge of making Pongal gift baskets for the Tamil Nadu Civil Supplies Corporation. Following public concerns regarding the poor quality of the rice, jaggery, and other hamper contents, this action was taken.