Massive GST fraud worth crores unearthed; one nabbed in Raipur
   Date :05-Feb-2020
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Staff Reporter :
 
RAIPUR,
 
IN A major expose, the Directorate General of Goods & Service Tax Intelligence (DGGI), Raipur Zonal Unit (RZU) busted a network of GST fraud involving fictitious transactions of steel goods by way of issuance of fake invoices generated by trading firms that existed only on paper. Promoter of the fake firm has been arrested and remanded to judicial custody. Investigation revealed that it was one of the biggest GST fraud cases in Central India in 2020.
 
The non-existent eight firms had purportedly transacted steel goods between them to the tune of Rs 400 crore involving GST of Rs 60 crore during the period from March 2018 to October 2019. The unearthing of racket was based on precise intelligence inputs, acting upon on which the DGGI undertook surveillance at several places across five states including Chhattisgarh, Odisha, Madhya Pradesh, Maharashtra and Rajasthan.
 
“The intelligence was successful in tracking and locating Prakash Bihari Lal Dadhichi, the promoter and one of the Directors of M/s. Dadhichi Iron and Steel Pvt. Ltd, Rajgangpur, Distt. Sundargarh, Odisha who had actually created a chain of eight fictitious trading firms at different places in different states. “Dadhichi had orchestrated the entire racket and managed to obtain registrations for such firms with the respective jurisdictional GST Department where the proprietors were either his close relatives, including female members of the family, friends, and staff including his erstwhile driver,” Nem Singh, Joint Director, DGGI, told ‘The Hitavada’. According to Singh, the DGGI sleuths conducted massive raid and search operations at 20 declared business premises, residential premises and other crucial locations in five States, which involved the participation of more than 100 officers including those from the jurisdictional CGST Commissionerates and other units of the DGGI.
 
“The entire operation was steered by Ajay Kumar Pandey (IRS) Additional Director General of the Raipur Unit of DGGI and were led under the guidance of Tikendra Kripal, Deputy Director, Sheeti Kantha Das, Assistant Director and Shivi Sangwan, Assistant Director,” he added. The investigation involved verification of the societal credentials of several persons, who were registered with the GST department as traders of steel goods.
 
“The said fictitious transactions had culminated as purchase transactions of M/s. Dadhichi Iron and Steel Pvt. Ltd thereby being facilitated with an Input Tax credit of Rs. 60 crore, which thereupon had been passed on to several end users within and outside Chhattisgarh,” Singh said. The search operations also led to the recovery of cash amounting to Rs. 89.5 lakh which was seized. Dadhichi was arrested on Tuesday and produced before the court of Chief Judicial Magistrate (CJM) in Raipur, from where he was directed to be sent to Central Jail under Judicial Custody Remand (JCR) for 14 days. The DGGI sleuths operations in unraveling the Central India’s biggest GST fraud racket was also marked by the technological modes and means used to track and locate the perpetrators of this economic offence. This technological aid also helped them to locate and track a few operatives of the racket to the Airport who had been attempting to flee from the scene of investigation.