Court Denies Bail in Rs.13 Crore GST Fraud; Orders Investigation against Tax Officials
A businessman’s pre-arrest bail was denied by a local court on the grounds that he is accused of GST Fraud worth Rs.13 crore by claiming input tax credit and that would not have been possible without the cooperation of government authorities. In 2021, the scam came to light during an investigation. Police are now directed by the court to begin an investigation against tax authorities. The businessman’s charges are severe, and the court’s decision to refuse bail emphasizes the need for a comprehensive inquiry into the case.
In April police arrested a person named Vikas in relation to the scam and took him into custody for further investigation. In a disclosure statement, a person named Ritesh Garg was identified by Vikas as a main player in the scam.
Garg requested bail last week, but on June 14, the bail request was rejected by the court. In his bail application, Garg stated that any act was not charged against him and also his name was not included in the FIR. He went on to say that since he is prepared to assist with the inquiry, detention should not be necessary for questioning.
Since Ritesh is suspected as the mastermind behind the scam, public prosecutor S.K. Parmar challenged the bail, arguing that his detention was required to obtain further evidence and retrieve the lost funds.
Following the excise and taxation officer of Gurgaon (north) filing a complaint at the Sadar police station in December 2021, a case was filed under sections 120B (criminal conspiracy), 420 (cheating), 467 (forgery of valuable security), 468 (forgery for cheating), and 471 (using forged documents as genuine). The complaint alleged that King Enterprise, which got a registration certificate in December 2014, had engaged in false ITC claims and misuse of “C” forms, resulting in a revenue loss of Rs.13.3 crore.
King Enterprise was found to have made fraudulent purchases and falsely claimed Rs.11.6 crore in input tax credits throughout the investigation. Additionally, the corporation had transferred the fake ITC, worth a total of Rs 6.4 crore, to a number of other businesses.
The address on the company’s registration documents was found to be false at the time of the investigation. The investigation revealed that the registration was done on fake documentation.
“Prove revealed that the linked account of the firm was held jointly by Bimla Devi and Vikas. The mobile number linked to the company’s email address belonged to Sunny Garg, who is the brother of Ritesh Garg. A subsequent inquiry showed that the company that had provided a surety at the time of King Enterprise’s registration was RK Trading, owned by Ritesh Garg,” stated the public prosecutor.
Allegedly, Ritesh and Sunny generated fraudulent voter cards for Vikas, as well as falsified rent agreements and other documents.
“King Enterprise was registered under different acts; however, the firm was not in existence right from its inception. This means that the involvement of concerned public servants in ensuring the registration of a non-existing firm cannot be ruled out,” Additional Sessions Judge Jagdeep Singh noted in his June 14 order, refusing the accused bail.
The Judge further said without the cooperation of employees of the relevant office, this non-existent company could not have engaged in the fraudulent input tax credit claim, which needed a thorough investigation.
