KOCHI: The government argued in the High Court that it was not legally tenable to demand a vigilance inquiry against the Chief Minister in a monthly pay-off case, where only the Income Tax Department and the CMRL company were parties.

Director General of Prosecution T A Shaji argued this in court against a petition filed by MLA Mathew Kuzhalnadan demanding a vigilance investigation into the monthly pay-off case. The report of the Income Tax Interim Settlement Board was to be kept confidential. The government also argued that an inquiry cannot be initiated based on this report. According to the Income Tax Department, CMRL has made illegal transactions of Rs 135 crore.

But the statements were recorded in connection with the transaction of Rs 1.72 crores with the Exalogic company of the Chief Minister's daughter. CMRL has submitted an affidavit that the money was transferred to Veena's company through banks for services as per the contract. CMRL employees however ruled out receiving any service from Exalogic.

Meanwhile, Veena Vijayan’s attorney said her client was roped into the case only due to political enmity. Justice K. Babu adjourned the petition to August 7 for Mathew Kuzhalnadan's response.