GST fraud mastermind held in Mumbai, brought to Indore
Updated Jun 16, 2020
After a multi-phased operation that has continued through a fortnight the Directorate General of GST intelligence (DGGI) and Directorate of Revenue Intelligence (DRI) arrested 3 persons and exposed GST evasion of Rs 400 crore till Sunday.
During the operation, the team seized 15 machines and seven trucks. The search operations continued in Indore till late night.
Under 'Operation Karka' -- named so because of oral cancer being caused by tobacco and Gutkha consumption -- three independent groups found to be involved in large scale clandestine manufacture, undeclared supply and illicit sale of pan masala/tobacco without payment of GST have been uncovered by the enforcement agencies.
Phase I of the 'Operation Kark' was launched on May 30 under which an accused Sanjay Mata was arrested on June 3. The second phase of the operation, under which the searches were made at over 16 locations in the city, was conducted between June 9 and 12. At the end of the second phase, tax evasion to the tune of Rs 225 crore was detected by Central GST intelligence officers after they busted illegal pan masala manufacturing units in the city.
DGGI investigations reveal the masterminds had set-up eight companies in the real estate, hospitality, and media sectors to launder illicit wealth generated from these businesses. The clique also has a Pakistani connection with a key operative Sanjay Mati holding that country's passport. Sanjay Mati was among the first to be arrested in the initial stages of 'Operation Karka'. The authorities had raided the business establishments of Gurnomal Mata. His brother Sandeep Mati is said to be absconding. A long trail of telephonic communication with Pakistani operatives has been traced to Sanjay's phone.
The searches revealed undeclared warehouses and residential locations in the city and Ujjain between Tuesday and Friday.
Even the Pan Masala business was handled through a network of front men headed by Vijay Nair. Wadhwani had ensured most companies had his relatives or close associates to ensure the front men did not acquire decisive ownership. Nair's arrest has led to the tracing of other key members of the clique.
The timeline shows a long series of encounters between the offenders and the authorities. Operations were also conducted as far back in 2012. The accused either escaped due to complicity of authorities or plain subjugation of the legal system.
"Based on preliminary investigations by DGGI, it has been estimated that the accused persons and their associates have evaded GST of around Rs 25 crore on the goods sold illicitly during the period July, 2019 till March, 2020." The total duty implication in this fraud is estimated to be around Rs 400 crore', said an official release.
"During the months (April & May, 2020) of pandemic lockdown these persons are believed to have resorted to large scale illicit sale and supply of pan masala/tobacco," said the release.