He vanished without paying his tax dues
He vanished without paying his tax dues
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India's richest lottery vendor has allegedly cheated the Karnataka government of Rs 52 crore from a house that once belonged to chief election commissioner T N Seshan.
Santiago Martin of Martin Lottery Agencies, which sells 12 million lottery tickets a day, gave the name of Kanniah Agencies when he was doing business in Bangalore.
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House that! Martin had bought the house from T N Seshan six years ago, and now it is in his wife's name |
When the Karnataka government banned lotteries in 2001, Kanniah Agencies vanished without paying its tax dues.
Tax officials who went to recover their dues found no company by the name of Kanniah Agencies. But they were startled to find relatives of Martin running a real state business from the same location.
Martin had bought the house from T N Seshan six years ago, and it is in his wife's name.
Who is Kanniah?
MiD DAY investigations revealed that Kanniah is the name of one of Martin's servants. Tax officials have not been able to trace him.
Martin's company had many agencies in Bangalore, allegedly owned by proxies on his behalf.u00a0 For the record, Samath Kumar owned Smart Agencies, and S Balaji owned Anthony Agencies. Both were workers in the Martin Company, and defaulted on the taxes.
"The promoters were evading tax," said R Guruprasad, lottery trade analyst. "After the ban, they were able to vanish as they had given fake addresses."
He said police action could bring them, and their friends in the tax department, to book.
One more case
Similarly, Samadhan Trading is a sister concern of Sugal and Damani, a leading travel agency, and owes the government Rs 21 crore.
Uttam Jain, state in-charge of Sugal and Damani, said, "We are no longer in Karnataka. As far as Samadhan Trading is concerned, I have no information." Jain lives in Bangalore.
Sugal and Damani was selling lottery tickets in Karnataka through Samadhan Trading. Samadhan was closed after the lottery ban, and Jain now claims he has no connection with Samadhan.
Jain runs a travel agency in Karnataka, while continuing to be in the lottery business in other states.
Taxman's woes
"It has become very difficult to recover taxes from these people. We can do little as the case is pending the court," said H S Hosamani, assistant commissioner, commercial tax.
Martin and others like him used to sell lottery tickets from Sikkim, Arunachala Pradesh, West Bengal, and Nagaland, and the commercial tax department had issued notices to the state governments for recovery, after it failed to trace the lottery promoters. The states moved the high court, and the case is pending.
"We can do nothing but keep our fingers crossed till the appeal is cleared," said Hosamani.
Rags to riches: Who is Martin?
Tax officials are after him in Karnataka, but the Sikkim government has made him an advisor.
Santiago Martin (45) is unlettered. He was a poor lottery ticket vendor in Coimbatore 15 years ago. Today, he is worth Rs 15,000 crore. He was the highest taxpayer in 2006-07.
His Martin Lottery Agencies, with a nationwide network, sells more than 12 million lottery tickets a day. He is the sole distributor for 28 Sikkim government lottery schemes, 17 Tamil Nadu schemes and six Arunachal Pradesh schemes.
Martin is the sub-distributor for Bhutan government lotteries as also for many state governments like Manipur, Meghalaya, Nagaland and West Bengal.
Every day, Martin pays Rs 3.5 lakh to the Tamil Nadu government as sales tax, which translates into Rs 130 million each year.
He pays the Sikkim government a daily advance of Rs 7.59 lakh.
The West Bengal government, too, gets an advance of Rs 50,000 from Martin every day.
His company, head-quartered at Coimbatore, employs 310 people and has 350 stockists across the country.
He is officially listed as an advisor to the Sikkim government. On a conservative estimate, his business generates anything between Rs 60 million and Rs 80 million every day.
A senior IT official, speaking on condition of anonymity, said, "We have sufficient evidence to prove how ordinary people are being cheated by big-time lottery operators."
'Not just us. Many promoters have defaulted'
Martin is out of the country. But his secretary Shahjahan was willing to answer questions on his behalf.
He admitted his company had defaulted on betting tax, but said theirs wasn't the only company to do so.
"Many promoters have defaulted, and the matter is pending in court. We have questioned the very law on which the tax was levied," he said.
He said there was no reason for Kanniah Agency to be at the address.
"It is closed in Karnataka as there are no lottery operations here. If the notice is returned, we are not responsible. Let the tax department send its notice to our counsel in Bangalore," he said.
Shahjahan denied knowing Kanniah, but not very convincingly. "He was the owner of the agency and I don't know where he is now. It is not true that he worked for Martin," he said.
On Seshan's house, he said: "It was indeed Seshan's property, and we bought it from him some ten years ago.
And the deal is legal."
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