It has been two and a half months since the UT excise and taxation commissioner-cum-deputy commissioner gave directions to lodge an FIR against five bogus dealers in the ₹70-crore fake GST bill racket, but the excise and taxation department is yet to get it registered with the police. Significantly, the department has not even recommended to the police the registration of an FIR in one of the five cases, said a senior UT administration official, who didn’t wish to be named. The directions for the registration of FIR were issued on August 9. The department received information regarding these bogus dealers in January 2019. Thereafter, inspections were conducted of their business premises. During the inspection, it was found that no business was being carried at the locations of these five registered dealers and no stock was present on their alleged business premises.
The five firms were identified as AK Trading Co in Khuda Jassu, Vinita Enterprises in Dhanas, RJ Enterprises in Makhanmajra, Mahadev Metals in Dariya and RD Trading Co in Sector 45. All five were listed as scrap dealers. The five bogus firms issued fake bills without any other company either purchasing or providing any goods or services from/to them. Bills bought by these companies, mostly situated in neighbouring states of Punjab, Haryana, Himachal Pradesh, and Delhi, were then used to claim input tax credit (ITC) from the government.
ITC is a tax that a business pays on a purchase and can be used to reduce its tax liability when it makes a sale (by claiming credit to the extent of GST paid). The dealers generated fake GST bills to the tune of ₹70 crore. The department issued notices for cancellation of the GST numbers of these dealers and directions were issued for registration of a case against them. Assistant excise and taxation commissioner RK Chaudhary said, “We are following up the matter with the police, and we have been assured that FIR will be registered within a week. We have already submitted the papers.”
After assessment of the transactions and fake GST bills, notices for unpaid taxes were issued to the tune of ₹17 crore and demand was generated. “But the imposition of penalty is still pending except in one case,” said the official. In the case of AK Trading, the penalty was imposed to the tune of around ₹4.3 crore. The dealer has deposited ₹47 lakh and filed an appeal with the appellant authority, which is pending. “We have issued notices for the imposition of penalties on all the defaulting firms. The penalty is equivalent to the tax demand generated,” said Chaudhary.
The fake GST bill scam is not the only case where the department has failed to get an FIR registered even after obtaining directions to do so. On August 8, the collector (excise)-cum-additional excise and taxation commissioner had directed the department to register an FIR against Hotel Turquoise, Industrial Phase 2, for selling liquor without the mandatory liquor licence. But the case is yet to be registered. Jaspal Singh Bhullar, SHO police station, Sector 17, said, “We have not received any complaint from the excise and taxation department for registration of FIR against Hotel Turquoise.”