Noida police bust 800 more illegal shell companies - Hindustan Times
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Noida police bust 800 more illegal shell companies

Jun 02, 2023 11:58 PM IST

Police said that when a chargesheet is filed in this case, provisions of the Gangster Act will be invoked because it is a matter of national security and a significant financial loss to the government

A gang of eight people who were arrested on Thursday for unscrupulously misusing permanent account number (PAN) cards of 635,000 people for over five years to create 2,660 shell companies to evade Goods and Services Tax (GST) worth multiple crores, had also created and registered 800 more shell companies that had not yet been sold, police officers familiar with the matter said on Friday.

The fraud involved registering thousands of companies using stolen or forged identities and then using these companies to raise e-way bills and claim an input tax credit (ITC) from the government. (Representational Image)
The fraud involved registering thousands of companies using stolen or forged identities and then using these companies to raise e-way bills and claim an input tax credit (ITC) from the government. (Representational Image)

“Besides the 2,660 shell companies, we discovered that the gang had registered 800 more companies with GST. During interrogation, the gang members said that they intended to sell these to their clients within the next two to three months,” said deputy commissioner of police (Noida) Harish Chander.

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Chander also said that if a chargesheet is filed in this case, provisions of the Gangster Act will be invoked. “Because it is a matter of national security and a significant financial loss to the government, provisions of the Gangster Act will be added to the first information report under which the suspects were arrested. They have been booked under sections of the Indian Penal Code dealing with cheating, forgery, and criminal conspiracy,” said the DCP.

The fraud involved registering thousands of companies using stolen or forged identities and then using these companies to raise e-way bills and claim an input tax credit (ITC) from the government.

While authorities are yet to ascertain the total amount of tax evasion, an official from the state GST department, who was present at a press conference held by the Gautam Budh Nagar police on Thursday, said that it could be estimated at more than 10,000 crore. Eight members of the gang were arrested on Thursday.

Meanwhile, officials from the Uttar Pradesh state GST department reported that 247 of the total shell companies discovered by police were registered in various locations throughout the state.

“The Gautam Budh Nagar police have provided information on the bogus companies. In Uttar Pradesh, 201 firms were registered with the central GST department, while 46 were registered with the UP state GST department. Only 14 of these are currently active, while the state GST department has deregistered 24 others and officials have blocked their ITC in the last two years following a red alert over their activities. The state GST department served notices on eight others on Friday, and action will be taken against them,” said Raja Ram Gupta, special investigation branch (grade 2), Uttar Pradesh state GST department.

He added that 11 of these firms were registered in Gautam Budh Nagar, with 10 under central GST jurisdiction and one under state GST. “On January 9, 2023, one firm from Gautam Budh Nagar applied for registration of plastic goods. However, following red alerts, the firm was deregistered from GST by state GST on March 4, 2023. We have also informed central GST officials about the bogus firms that are registered in Uttar Pradesh but fall under the jurisdiction of the CGST,” Gupta said.

The shell companies discovered during the police investigation, according to an official from the Central Goods and Services Tax, Principal Commissionerate, Noida, will be de-registered by the department.

“We have written to the Gautam Budh Nagar police to request that they provide the data and evidence discovered during their investigation to the GST department so that we can take appropriate action against the suspects. We will begin procedures to deregister the 2,660 bogus firms set up by the suspects, as well as the 800 other such firms whose documents were also discovered during the investigation, to prevent further GST fraud,” said a central GST office official, who requested anonymity because he was not authorised to speak to the media.

DCP Chander said that a criminal investigation is underway, while the respective GST departments will conduct the economic offences investigation.

Seven gang members are currently on the run, and a dedicated team has been formed to apprehend them.

“The wanted suspects bought shell companies from the arrested suspects and used them to generate fake e-way bills for their clients, who were most likely businessmen attempting to evade GST and tax. The devices recovered from the suspects, including 32 mobile phones, 24 computer systems, four laptops, and three hard discs, have been sent to the forensics team to recover the data, which will likely reveal the identities of more people involved in this gang,” said DCP Chander.

Eight suspects were apprehended in Delhi’s Madhu Vihar on Thursday and taken into custody. Four live in Delhi: Rajeev, 38, Vishal, 20, Deepak Murjani, 48, and his wife Vinita, 45. Avni, 25 is from Noida, Akash Saini, 21 is from Sahibabad, Atul Sengar, 23, is from Hathras, and Yasin Sheikh, 38, is from Mumbai.

Officials identified the seven suspects who are on the run as Pradeep Goyal, Archit, Aanchit Goyal, Mayur aka Manu Nagpal, Charu Nagpal, Rohit Nagpal, and Deepak Singhal.

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  • ABOUT THE AUTHOR
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    Ashni Dhaor is a correspondent with Hindustan Times. She covers crime, education, health, politics, civic issues and environment in Ghaziabad city. She graduated from Delhi University in 2015 and has since been working with Hindustan Times since.

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