New Delhi, August 12, 2024 — In a shocking revelation, the Anti-Corruption Bureau (ACB) of the Delhi Government has uncovered a massive ₹54 crore fraud involving a rogue tax officer, three lawyers, and several accomplices who orchestrated a sophisticated scam against the Goods and Service Tax (GST) Department. The operation exploited 500 fake companies to siphon off GST refunds in the national capital.
The “Special 7” and 500 Fake Firms
The fraudulent scheme was masterminded by a GST Officer (GSTO) named Babita Sharma, three lawyers, two transporters, and the owner of a fraudulent company. Together, they created and operated 500 fake companies, supposedly involved in the import and export of medical goods, to claim fraudulent GST refunds. The fake invoices generated by these companies amounted to ₹718 crore, resulting in ₹54 crore worth of fraudulent refunds.
Between 2021 and 2022, Babita Sharma, the GSTO at the center of the scam, used 96 fake firms to approve over 400 GST refunds amounting to ₹35.51 crore. Initially, only ₹7 lakh in refunds were approved, but this figure skyrocketed as the fraudulent activity escalated.
Sharma’s suspicious activities raised red flags when, shortly after being transferred to Ward 22 of the GST office in 2021, over 50 firms applied for migration from Ward 6 to Ward 22. The migration was approved within days, prompting the GST Vigilance Department to investigate. This led to the discovery of the extensive GST fraud, which was deeply rooted within the department itself.
How the Scam Worked: The Modus Operandi
The probe, later handed over to the ACB, revealed that the fake firms generated invoices worth ₹718 crore. These invoices were for fake purchases, with no real business transactions taking place. The GSTO approved refunds without verifying the invoices or Input Tax Credit (ITC), a critical step in the process.
In the initial phase, over 40 firms were supposedly supplying goods, but no records of these transactions were available in the second phase of the investigation. Furthermore, 15 of these firms lacked the mandatory Aadhaar Card verification and physical verification during their GST registration, violating GST registration rules.
Among the 53 firms that migrated to Ward 22 after Babita Sharma’s transfer, 48 received GST refunds totaling ₹12.32 crore. The Non-Objection Certificates (NOCs) from property owners for these firms were suspiciously prepared between July 26, 2021, and July 27, 2021, coinciding with Sharma’s transfer.
The Lawyers’ Role: Fake Firms and Bank Accounts
The investigation revealed that the GST refunds were deposited into the bank accounts of three lawyers — Rajat, Mukesh, and Narendra Saini — and their family members. The ACB identified 1,000 bank accounts directly linked to the fake firms, their family members, and employees involved in the scam.
The trio operated 23 fake firms using a single email ID and mobile numbers. Five of these firms were registered under the same PAN number and email ID to generate multiple GST registration numbers, facilitating the scam. These 23 firms alone generated fake invoices worth ₹173 crore, with seven firms purportedly involved in the supply of medical goods showing business activity worth ₹30 crore in their invoices.
Arrests and Ongoing Investigation
The ACB has already arrested Manoj Goyal, the owner of one of the fake firms, and two transporters, Surjeet Singh and Lalit Kumar, who were complicit in the scam. The transporters were paid for providing forged e-way bills and receipts for carrying goods, despite no actual services being rendered.
The Anti-Corruption Bureau continues to investigate the case, with more arrests and revelations expected as the probe deepens.
