LI Network
Published on: October 25, 2023 at 11:10 IST
The Uttarakhand GST Department has apprehended an individual on charges of tax evasion amounting to over Rs 18 crore, related to a business with a turnover of Rs 100 crore.
The accused is accused of creating several fictitious companies in collusion with others to carry out this evasion, as confirmed by officials on Monday.
Shahnawaz Hussain had been on the run since March 4, 2023, when the department initiated an extensive search and seizure operation to uncover the scheme in the Jaspur area of Udham Singh Nagar district in Uttarakhand. His arrest took place on a recent Sunday.
This investigation extended for nearly a year, driven by the directives of Commissioner Tax, Uttarakhand, Dr. Ahmed Iqbal, under the leadership of Additional Commissioner, Kumaon, Rakesh Verma, and the oversight of Joint Commissioner Ranveer Singh.
The operation employed advanced technologies, including drones, digital tracking, and analysis software like FALKAN and Artificial Superintelligence (ASI), alongside electronic surveillance.
Officials revealed, “We have recovered around Rs 15 crore till now, out of which, Rs 2.5 crore is in cash and Rs 12.3 crore is IGST outflow. Enforcement action has been taken on the vehicles carrying bills of the fake supplier.”
They also stated that the registration of over 90 firms within state jurisdictions had been canceled, and 300 bank accounts were frozen. More arrests are anticipated in the coming days, with strict actions planned against those involved in tax evasion cases.
The investigation exposed a network of traders who established sham firms to legitimize their illegal timber and timber products trade and evade GST worth crores in Udham Singh Nagar, which is one of the leading timber markets supplying timber products across India. The involvement of individuals from other states such as Uttar Pradesh, Haryana, Delhi, Bihar, and Rajasthan was suspected.
This operation involved 27 teams comprising over 300 tax and forensic officials, along with financial technology experts. They conducted raids on 27 commercial establishments, residences of transporters, advocates, and chartered accountants.
The investigation team discovered multiple firms registered in the name of a single individual with the sole aim of deceiving tax authorities.
The accused had devised a plan to circumvent the GST regulations since their implementation in 2017 by providing false companies with legal cover, making it appear as if they procured raw materials from the black market.
The investigators also suspect the involvement of bank officials who aided in opening accounts without proper KYC procedures. Approximately 25 to 30 individuals played pivotal roles in collusion with one another within this network.
Forensic experts were enlisted to verify data obtained from electronic devices. Businesses and unregistered premises found to be locked were sealed with the assistance of the district administration.