Country’s first prosecution complaint for GST evasion filed in Ludhiana CJM court

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Proprietors of two firms issued fake invoices and evaded tax to the tune of Rs 40 crore

The Hush Post: In July this year, a racket that used fake bills to claim input tax credit worth Rs 40 crore was unearthed by the Ludhiana unit of Directorate General of GST Intelligence (DGGI). The investigating agency has now submitted a detailed prosecution complaint in the court of Chief Judicial Magistrate, Ludhiana.

According to The Hindustan Times, the prosecution complaint has been filed against proprietors of two Delhi based firms — Jatinder Menro of Pingashk Enterprises and Sammy Dhiman of Shree Radha Group.

“A thorough scrutiny of the documents such as purchase details, financial details, sale detail and further sale of goods to approximately six firms, all based in Punjab, revealed that no transactions were ever made and the documents were bogus,” said Rachana Singh, Deputy Director, DGGI, Ludhiana.
GST evasion matter in court

“This is country’s first prosecution complaint filed in court as we managed to establish the evasion of taxes in crores,” said Rachana Singh, deputy director, DGGI, Ludhiana.

The proprietors of the two firms issued fake invoices while there was no actual movement of goods and the entire sale-purchase took place on paper only. Then, they availed input tax credit (ITC) from the government. In this manner, they managed to evade tax to the tune of Rs 40 crore.  The factories they showed on paper never existed and multiple deeds were made on the same fake stamp paper, which was used again and again.

“Sammy and Jatinder showed sale and purchase of goods from each other’s companies and prepared counterfeit bills. They (the firms) were only exchanging invoices for so-called sale and purchase. They were raising invoices only on paper, but no actual sale or purchase of goods took place,” added Rachana Singh.

The two proprietors are already in judicial custody and the trial is set to begin on the next date of hearing. The prosecution complaint has been filed in the court under Section 132 of CGST Act (supplying invoices without supply of goods to evade tax).


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