In a case, Justice Chandrachud today said that “The country needs to come out of this tax culture that ‘all businesses are fraudulent’. Even where 12 crore tax has been paid (by the assessee), just because some tax is still due, you can’t start attaching property! If there is any alienation of assets or the assessee is winding up or going into liquidation, it is understandable. But just because you have the account numbers, you can’t start attaching and even block the receivables!”
It is apparent from the investigation conducted till date, that Shri Ravinder Kumar created multiple proprietorship, partnership firms and private limited companies based in Haryana, New Delhi and Jharkhand merely on paper. Shri Ravinder kept eluding the investigation and did not appear before the investigating authorities even after issuance of Summons on multiple occasions.
The total fake Input Tax Credit passed on by such fictitious intermediatory companies is quantified to be Rs. 92.18 crore whereas, the total fake Input Tax Credit passed on by other fictitious and non-existent firms
The offence committed by the accused Shri Nihaluddin is covered under Section 132(1)(b) of the CGST Act, 2017 which is cognizable and non-bailable offences as per the provision of Section 132(5) and punishable under clause (i) of sub section 1 of Section 132 of the Act ibid. Accordingly, Shri Nihaluddin was arrested under Section 69(1) of the CGST Act, 2017 and produced before the Duty Magistrate on 01.03.2021 who remanded him to judicial custody of 14 days till 15.03.2021. Further investigation in the case is underway.
Nainaram Meghwal, a daily wage laborer from Dungarpur, a small village near Roht in Pali, was turned into a diamond business worth Rs 23.80 crore by the GST fraud gang. Through a NREGA mate, fraudulent documents were obtained, then opened a fake company in his name and started GST theft and bogus billing.
In the ensuing initiative to counter the menace of fake billing operations, the officers of Central Goods and Services Tax (CGST) Commissionerate, Delhi North, on the basis of intelligence developed through extensive data analytics, have unearthed a network of fictitious firms to generate goods-less invoices and pass-on fake Input Tax Credit to multiple beneficiaries. In all, four individuals were arrested in three different cases in terms of Section 69(1) of the CGST Act, 2017 for commission of offences under Section 132 (1) of the CGST Act, 2017. The total Input Tax Credit involved in the three cases is Rs. 178 crore. Further investigations in all the matters are in progress and the amount of fake credit and total number of companies/persons involved are likely to increase.
It is apparent from the investigation conducted till date, that Shri Surender Kumar Gupta, Director of M/s. Mystic Exim Pvt. Ltd., M/s. Landmark Traders Pvt. Ltd. and Controller of M/s. JKM Impex forged documents to show receipt of goods in his above mentioned companies/firms from multiple fictitious/non-existent entities, which never existed at their given addresses. The entities of Shri Surender Kumar Gupta had further passed on the fake ITC to multiple exporter firms, who had further encashed such ITC through fraudulent IGST refunds.
Sh. Nitin Jain, C.A has been arrested under Section 69(1) of the CGST Act’2017 and produced before the Duty Magistrate. He has been remanded in judicial custody of 14 days upto 27.01.2021 by the Duty Magistrate. Further investigation in this case is under progress.