GST Officer and Three Lawyers Arrested in Delhi for Rs 54 Crore Fraud

Seven individuals, including a GST officer and three lawyers, have been detained by the Delhi government's Anti-Corruption Branch (ACB) for their alleged role in a GST fraud, officials announced on Monday. The accused include GST officer Babita Sharma; advocates Raj Singh Saini, Narender Kumar Saini, and Mukesh Soni; transporters Surjeet Singh and Lalit Kumar; and Manoj Goyal, a proprietor of one of the fake firms.

Details of the Fraudulent Scheme

The fraudulent scheme involved sanctioning GST funds worth over Rs 54 crore to 96 bogus firms. Joint Commissioner of Police, ACB, Madhur Verma stated that Babita Sharma allegedly approved the refunds, while the three advocates were the main beneficiaries. Surjeet Singh and Lalit Kumar provided fake e-way bills and forged goods receipts to the advocates in return for money. Manoj Goyal also profited from these refunds.

In September 2021, the GST Department Vigilance suspected irregularities in refund issuance to these fake firms. A special team was dispatched for physical verification, which revealed that all these firms were non-existent and non-functional. On October 5, Additional Commissioner Trade and Taxes Vivek Aggarwal ordered a preliminary inquiry into the matter.

Investigation Findings

The investigation uncovered that fraudulent GST refunds were approved without verifying Input Tax Credit (ITC), leading to significant losses for the government. In 15 cases, there was no Aadhaar authentication during registration or physical verification. Additionally, NOCs from property owners for 48 firms were prepared on July 26 and July 27, 2021.

Further scrutiny revealed that five firms were registered under the same PAN, email ID, and mobile number. Time-barred refund applications were also sanctioned by the GST officer. The bogus firms received fraudulent GST refunds amounting to Rs 54.5 crore between July 1, 2017, and August 26, 2021.

Role of Key Individuals

Babita Sharma's role was critical as she allegedly sanctioned the refunds without proper verification. The three advocates benefited directly from these fraudulent refunds. Transporters Surjeet Singh and Lalit Kumar facilitated the process by providing fake documents. Manoj Goyal was another beneficiary who gained from these illegal refunds.

The matter was referred to the ACB for a detailed investigation on December 6 following the preliminary inquiry's findings. This investigation confirmed that fraudulent activities had caused a direct loss to the government exchequer due to unverified ITC claims.

The arrests highlight ongoing efforts to combat corruption within government departments. The case underscores the importance of stringent verification processes to prevent such frauds in the future.

The investigation continues as authorities aim to uncover more details about this extensive fraud network.