Uttarakhand Goods and Services (GST) Department uncovered the avoidance of crores of rupees via illegal timber sales using false bills. According to reports, they set up a number of fictitious businesses to cover up the illegal sale and purchase of timber and its products, resulting in crores of rupees in tax evasion.
Since the GST was implemented in India in 2017, the investigators who have been following the illegal network of these activities for the past nine months think that initially, some people devised a plan to evade the new tax system and give legal cover to raw materials bought from the black market.
The department deployed 27 teams with approximately 300 police, including forensic and financial technology experts, who conducted raids on 27 businesses, homes, transport companies, law offices, and chartered accounting firms.
“The modus operandi was first to float fake firms which worked on paper only. Companies dealing in timber were sourcing raw materials from the grey market and using these fake firms as their genuine suppliers by getting purchase orders and bills from them. They paid input tax credit to these fake firms which caused a huge loss to the government.” said Ranveer Singh, Joint Commissioner, Special Investigation Bureau.
It was reported that during the initial investigation, it was discovered that a network was engaged in setting up fictitious businesses using other people’s documents without their permission and allegedly inflicting significant financial loss.
Furthermore, the nexus was involved in transferring fraudulent input tax credits to Uttar Pradesh, and Yamunanagar in Haryana on the basis of paper trading by producing phoney invoices and without really supplying any items to those locations.
The department enlisted the help of digital and forensic experts, who typically support the nation’s top investigative agencies like the Central Bureau of Investigation and the Enforcement Directorate, in light of the illegal network’s expansion to distant locations and the participation of individuals from a variety of professional fields.
On March 4, 2023, the Uttarakhand State GST Department discovered an organised ring of questionable dealers in the Jaspur area of the Udham Singh Nagar district. This search and seizure operation was a first of its type and involved digital tracking, forensic audit, and electronic surveillance.
Also reported that “The search and seizure operation started at 11 am on March 4 and continued till late night. Teams have seized substantial amounts of documents, electronic devices like mobile phones, laptops, tablets, stamps, bill books, ATM/Debit/Credit Cards, cheque books, signed blank cheques etc that were found during the search operation,”
Further added that “Under the new initiative that our department has taken, we sought help from forensic experts to verify the data seized from the electronic devices. Seven lakh rupees cash were also seized during the operation. Firms and unregistered places of business that were found locked have been sealed with the help of the district administration. Seizure, evidence gathering and recording of statements continued till 9 pm.”
This search and seizure operation was a first of its type and involved digital tracking, forensic audit, and electronic surveillance.
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