In a major crackdown carried out in coordination with the State GST department, Shahjahanpur police have arrested two active members of a gang involved in evading Goods and Services Tax (GST) amounting to ₹10.77 crore. The accused allegedly operated a network of bogus GST firms to facilitate tax evasion for traders in return for hefty commissions. Police said documents related to 90 fake firms, a car and two high-end mobile phones were recovered from their possession.
The arrested accused have been identified as Sanjeev Gupta, a resident of Ghaziabad, and Varun Sharma, a resident of Amethi. According to the police, acting on a tip-off, a team laid a trap near the Mezban Bridge in the Roza police station area and intercepted a car, leading to their arrest. During the initial search, a large number of suspicious documents were found, following which both were taken into custody for detailed questioning.
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Bogus Registrations Using Aadhaar and PAN
Investigations revealed that the accused were part of an organised racket involved in creating bogus GST firms. For every fake GST firm, they allegedly paid around ₹23,000 in cash to the key members of the gang. These firms were then provided to traders who intended to misuse Input Tax Credit (ITC) or adopt other illegal methods to evade taxes. Through such firms, paper transactions were shown to avoid actual tax liabilities on a large scale.
Police questioning further revealed that the accused used social media platforms to post advertisements offering easy loans. Through these advertisements, they lured unsuspecting people and collected their Aadhaar cards, PAN cards and electricity bills. Using these documents, fake rent agreements were prepared and bogus GST firms were registered in their names. Bank accounts were also opened in the name of these firms, which were subsequently used for suspicious and fraudulent financial transactions.
Impact on Government and Honest Businesses
According to the police, fake business activities were shown through these shell firms to facilitate large-scale tax evasion. This not only caused significant losses to the government exchequer but also adversely affected legitimate and honest businesses. Digital data recovered from the seized mobile phones contained crucial evidence related to fake firms, bank accounts and financial transactions. The data has been sent for forensic examination, officials said.
Gang’s Origins and Confessions
The case was originally registered on May 28, 2025, at Roza police station against individuals involved in GST evasion through fake firms. The FIR includes charges related to causing loss to government revenue and the use of forged documents. Earlier, three other members of the same gang had been arrested and sent to jail. Interrogation of those accused led to the exposure of GST evasion amounting to ₹10.77 crore and revealed the involvement of other members of the network.
During questioning, Sanjeev Gupta told the police that he came into contact with a person named Gaurav Yadav in 2022, through whom he was introduced to other members of the gang. He admitted to opening several bank accounts in his own name and in the names of acquaintances, which were later used for transactions linked to fake firms. Some of these accounts were subsequently closed after being flagged for exceeding limits or suspicious activity, police said.
Police officials stated that efforts are underway to trace and arrest other members of the gang, and more arrests are likely in the coming days. The investigation is being carried out with assistance from the GST department, the cyber cell and banking agencies. The police claimed that the action has dealt a major blow to the fake GST firm network and that further investigation could lead to the unearthing of additional cases of tax evasion.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
