In a swift and coordinated action on Friday, 2nd August 2019, the Investigation Wing of Income Tax Department, NER carried out searches on certain businessmen in Meghalaya found to be involved in running a web of petrol pumps managed and controlled as benami properties. These persons were depriving the State Government of legitimate revenue by suppressing sales and non-deposit of local taxes collected, while also indulging in massive evasion of income tax by misusing exemption under Section 10(26) of the Income Tax Act, 1961 meant for tribal persons.

In the enforcement operation that commenced in the early hours and went on till wee hours of the next day, more than ₹ 2 crore of unaccounted cash alongwith incriminating documents have been seized by officials of the Department. The cash found was hidden in unexpected places like water tanks.

This search by the Department was a much needed action on a long existing racket run by some unscrupulous elements exploiting local citizens of Meghalaya and avoiding paying income tax using tribal persons who are exempted from income tax, as a front. The pre-search investigation involved extensive surveillance and covert enquiries which were continuing for over a year.

Following the searches exposing these benami petrol pumps, the Executive Committee (EC) member of Khasi Hills Autonomous District Council (KHADC) in-charge of trade, announced to the media on the 8th of August, 2019 that urgent steps will be taken to prevent benami transactions in the State. He noted that despite the law, benami transactions are thriving due to collusion between some local people and their non-tribal business partners. The KHADC is a statutory autonomous body which regulates various aspects of trade and commerce in Meghalaya.

The action taken by the Department has been widely appreciated by the public and also local authorities as a timely and positive step that will help to control the menace of benami commercial activities, as well as augment Government revenues.

Benami property enforcement exposes petrol retail tax evasion using tribal exemptions, prompting targeted searches and asset seizure. Enforcement action targeted alleged benami petrol retail operations in Meghalaya, conducted after prolonged surveillance and covert enquiries; searches uncovered incriminating documents and significant unaccounted cash concealed on premises, and exposed misuse of the tribal exemption as a front to suppress sales and avoid local tax deposits, highlighting coordinated search-and-seizure methods and evidence seizure to address collusive benami schemes.