An elaborate Rs 150 crore tax fraud scheme, involving fictitious traders and the complicity of government officials, has been uncovered in Maharashtra.
According to reports, the fraud was first discovered in 2022, prompting the vigilance wing to launch a comprehensive investigation. Preliminary findings indicated that the fraud’s masterminds established approximately 40 shell companies, granting over Rs 150 crore in non-refundable returns to 16 traders from Ghatkopar and one from Kurla.
The fraudulent traders had official registration certificates that listed only three Ghatkopar addresses, which were all small rented shops spanning just 200 to 300 square feet. Shockingly, these shop owners were fictitious, and documents were forged, while the companies’ directors held professions such as laborers, porters, hotel waiters, and drivers. Following notification from higher authorities, an investigation committee was formed on April 6, 2022, led by the additional state tax commissioner for the Thane region. The committee identified that 17 traders, registered under the Goods and Services Tax (GST), had submitted 40 refund applications for the 2021-2022 financial year, totaling over Rs 150 crore. These applications were filed under the categories of “Exports of goods without payment of tax” and “Inverted tax structures.”
The investigation has revealed involvement by several top officials, causing delays in registering an FIR. The primary suspect in the fraudulent refunds, state tax officer Amit Lalge, was suspended in May 2022, while officer Gajanan Lad, who processed one application for a Kurla-based trader, was suspended in June this year. A proposal for a departmental inquiry under the Maharashtra Civil Services (Conduct and Appeal) Rules 1979 has been submitted to the government.
To determine the actual refund value, the department is in the process of reassessment based on available documents. The traders involved have all received show-cause notices, and once the value of the dubious refunds is confirmed, recovery efforts will commence.
A senior GST official has disclosed that Amit Lalge confessed to accepting kickbacks from traders during the internal investigation, implicating senior officials in the process. This revelation may be contributing to the attempts to cover up the matter. Under Departmental Inquiry Rules, if a government official is found responsible for revenue loss, criminal action should be taken, and an FIR must be filed. However, no FIR has been lodged against the involved officers. This incident raises concerns over the involvement of government officials in a fraudulent scheme and the failure to hold them accountable.