GST fraud: Kala Amb industrialists in 5-day police remand


Shimla: A day after two Kala Amb industrialists were arrested by a team of excise and taxation department, South enforcement zone, Parwanoo, in a GST fraud case, the accused were produced in the court of additional chief judicial magistrate, Kasauli, on Tuesday from where they were sent to five-day police remand. The fraud involves paper transactions of around Rs 150 crore and GST of around Rs 15 crore.
Joint commissioner, state taxes and excise, South enforcement zone, Parwanoo, Dr Sunil Kumar confirmed the development and said senior advocate and special counsel of the state government Ankush Dass Sood pleaded the case on behalf of the department.

According to sources, the arrested industrialists use to convert battery scrap into lead ingots and sold the same to dealers in Himachal Pradesh. They added that Himachal Pradesh produced maximum numbers of batteries in North India and such evaders had forced the honest tax payers out of business in the state. Himachal Pradesh is suffering worst loss in GST collections and such frauds were contributing to this, they added.

The game plan of the dealers was to hire a big advocate, if penalised by the tax authorities, so as to drag the case for years till Supreme Court. Their plan was to stretch the case for 30-40 years so that everything will be over by then. However, they failed to take into account of GST provisions where imprisonment is provided for such frauds. There is a provision of five-year imprisonment if convicted for GST fraud of more than Rs 5 crore, sources added.

Accused businessmen used to purchase raw materials worth crores of rupees on papers from Delhi-based traders. In past summons were sent to those traders in the National Capital by registered posts, but letters returned undelivered with remarks that address was incomplete.

Three such traders were physically verified in Delhi were found to be non existent. At two places, shops of other traders were found at the given addresses while at another address a pharmaceutical company was found functioning.

Sources added that owners of these three trading firms were tracked with the help of address given on PAN. Sales of around Rs 60 crore have been shown from these three firms within two months.

It was also found that owner of a Delhi-based firm was a taxi driver while another was working as a helper in a milk dairy. Owner of the third firm was found to be a factory worker.

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