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MP trader misused passes in lockdown, police probe on
The Directorate General of GST Intelligence (DGGI) said it has unearthed an alleged goods and services tax (GST) evasion of over Rs 500 crore by chewing tobacco (pan masala and gutka) manufacturers, dealers, and distributors in Indore.
The Directorate General of GST Intelligence (DGGI) said it has unearthed an alleged goods and services tax (GST) evasion of over Rs 500 crore by chewing tobacco (pan masala and gutka) manufacturers, dealers, and distributors in Indore.
Kishore Wadhwani, a trader who has been named one of the main accused in the case, allegedly used his media outlet to obtain curfew passes which were misused to transport gutka and cigarettes during the Covid-19 lockdown when only the transportation of essential goods was allowed, officials said on Tuesday.
DGGI said in a statement that Wadhwani was arrested on June 15 and has been remanded to custody until June 30 in Indore. He has been booked for allegedly making fraudulent bills and using press stickers obtained from the district administration on vehicles used to transport gutka and tobacco, an official investigating the matter said on condition of anonymity.
In the statement, DGGI’s Bhopal unit added that searches were conducted on the premises of gutka and tobacco dealers and distributors from June 9 to June 12, leading to the seizure of stocked non-GST paid pan masala and tobacco. The statement said the raids led to the detection of an estimated GST evasion of Rs 400 crore. “One of the masterminds and financial beneficiaries of the pan masala/tobacco GST evasion, who was arrested from Mumbai on June 15, was also found involved in manufacture and supply of cigarettes from a unit named M/s Ellora Tobacco Company Limited, Indore.”
The statement said the unit has paid only Rs 3.55 crore over the last two financial years as GST. “Investigations conducted by DGGI has unearthed a major tax/ duty/ cess evasion estimated to be about Rs 105 crore only for the period from April 2019 to May 2020.”
The statement added: “Hence the total revenue evasion, which would be clear only after completion of the investigation, is suspected to be multiple times higher. The tax evasion syndicate, in this case, involves directors of the company, transporters, supporting manufacturers, and raw material suppliers.”
The statement said a number of accused were absconding and have not joined DGGI investigations. It added that a search at a factory of the company revealed a secret exit used to bring in unaccounted raw materials and toship out finished goods.
The statement said DGGI located one of the clandestine and unregistered godowns used by the alleged tax evaders. It added there could be several other such undeclared godowns in and around Indore.
The statement said Wadhwani started a media company and allegedly used it to “book fictitious advertising” to show income.
DGGI additional director, PL Singh, declined comment and said he has nothing to add to the statement.
Indore collector, Manish Singh, said the district administration issued passes to 500-600 traders during the lockdown but has nothing to do with any taxation.
Wadhwani’s lawyer, Avinash M Sirpurkar, rejected the allegations against his client. “I am unable to understand how DGGI could unearth such a huge tax evasion during just five days of his remand. The charges regarding tax evasion against Wadhwani are completely baseless. Even if it is presumed that he indulged in tax evasion, it is a civil law matter related to GST, but Wadhwani was booked under the Indian Penal Code over alleged bills and press stickers just to harass him.”
(With input from Neha Jain in Indore)
