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Indore

Updated on: Saturday, June 13, 2020, 11:32 PM IST

Indore Paan Masala Case: Rs 400 cr GST evasion revealed, 3 held

Mastermind of the case still abounding
Raid at tobacco factory |

Raid at tobacco factory |

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Indore: After the filmy description of raids in the last few days, in the second phase of Operation Kark (Cancer), the Directorate General of GST intelligence (DGGI) and Directorate of Revenue Intelligence (DRI) succeeded in arresting 3 persons and exposing the GST evasion of Rs 400 crore. During the operation, the team seized 15 machines and seven trucks. However, the mastermind of the scam is still absconding. Meanwhile, the search operations in the city are still on.

Under ‘Operation Kark', three independent groups found to be involved in large scale clandestine manufacture, undeclared supply and illicit sale of pan masala/ tobacco without payment of GST have been covered by the enforcement agencies.

The first phase of the ‘Operation Kark’ was launched on May 30. Under the operation, one accused Sanjay Mata was arrested on June 3. The second phase of the operation, under which the searches were made at over 16 locations in the city, was conducted between June 9 and 12. At the end of the second phase, tax evasion to the tune of Rs 225 crore has been detected by Central GST intelligence officers after they busted illegal pan masala manufacturing units in the city.

The searches revealed undeclared warehouses and residential locations in the city and Ujjain between Tuesday and Friday.

According to an official statement issued on Saturday, “based on preliminary investigations by DGGI, it has been estimated that the accused persons and their associates have evaded GST of around Rs. 25 crore on the goods sold illicitly during the period July, 2019 till March, 2020," it said. The total duty implication in this fraud is estimated to be around Rs 400 crore’.

“During the emergent months (April & May, 2020) of pandemic lockdown also, these persons are believed to have resorted to large scale illicit sale and supply of pan masala/ tobacco," it said, adding that further investigation in the matter was continuing.

Mastermind set-up eight companies

The DGGI investigations indicate that the masterminds of this fraud had set-up eight companies in the real estate, hospitality and media sectors to launder illicit wealth generated from these businesses.

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Press stickers bearing 70 cargo trucks used

The accused are believed to have used more than 70 cargo trucks for orchestrating this GST fraud for the last many years. “The cargo trucks were found to be bearing display of ‘On Press Duty’ for ferrying the illicit consignments of pan masala/ tobacco and their raw materials within MP and to neighbouring states. The drivers were found to be carrying identity cards of a local Indore newspaper," the statement said.

Operation conducted in Jabalpur, Bhopal too

During the search operation which was also conducted in Jabalpur and Bhopal in addition to Indore and Ujjain, unaccounted finished goods (branded pan masala and tobacco) and primary raw material such as betel nuts, raw tobacco, essence and packing material, have been seized in large quantities from undeclared premises.

Mastermind floated dummy compnaies

“To avoid detection, the masterminds and organizers of this fraud had floated the partnership/ proprietorship/HUF firms engaged in manufacturing and trading of pan masala and tobacco owned on paper by three dummy persons. These three dummy persons had actively colluded and knowingly participated in the GST fraud," it said.

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Sale of tobacco was banned in Lock-down

Sale and distribution of paan masala and chewing tobacco had been completely banned across India due to the pandemic-induced lockdown from March 25 considering its risk in spreading COVID-19 infection. But the accused were involved in selling the tobacco based Pan Masala.

One sent to police custody, two in judicial remand

in this case DGGI and DRI arrested accused Vijay Kumar Nayar, proprietor of AAA Enterprises, Ashok Daga and Amit Kumar Bothra both partners of Vishnu Essence under Section 132 (1) (A & I) of GST Act 2017 and under section 409 , 467, 471 and 120 of IPC. They were produced in the court of Arvind Gurjar, First Class Judicial Magistrate, on Saturday. On request of Special Public Prosecutor of DGGI Chandan Airen, the court ordered to send Vijay kumar to Police remand till June 16 and Ashok and Amit in Judicial Remand till June 17.

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Published on: Sunday, June 14, 2020, 05:00 AM IST
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