Kanpur: A large amount of cash has been recovered by the State GST (SGST) Department during an investigation into alleged GST irregularities in the business of a company supplying defence products. The Special Investigation Unit of SGST Kanpur conducted simultaneous raids at the company’s headquarters in Sooterganj and its factory in Unnao on Wednesday. The operation continued for nearly 36 hours and concluded late Thursday evening. During the searches, ₹2.69 crore in cash was recovered from the company’s headquarters. According to officials, the businessman failed to provide a satisfactory explanation or the necessary documents regarding the source and purpose of the cash.
According to officials, the company supplies defence-related products through the Government e-Marketplace (GeM) portal. The department had received information about possible irregularities in the company’s business transactions, purchase and sales records and tax-related documents. Following this, teams from the Special Investigation Unit began examining the company’s records at both locations.
₹2.69 Crore Cash Recovered From Headquarters
During the raid, officials found a substantial amount of cash at the company’s office in Sooterganj and sought detailed information about it. The businessman was asked to provide documents explaining the source of the ₹2.69 crore, the reason for keeping such a large amount of cash at the office and its connection with the company’s accounts. According to the department, he could not provide a satisfactory explanation.
The required documents relating to the cash were also reportedly not produced before the Income Tax Department officials. Following this, SGST and Income Tax officials deposited the recovered amount in a bank as part of the official procedure. The investigation will now determine whether the cash was linked to the company’s business transactions or originated from another source.
GeM Supply Records Under Scrutiny
A major focus of the investigation is the company’s business conducted through the GeM portal. Officials are examining which products were supplied through the government procurement platform, the value of the transactions and the nature of invoices and tax documents prepared for these supplies.
The investigation includes scrutiny of GST returns, purchase and sales invoices, bank accounts, stock registers and other financial records. Officials are also examining whether there is any financial connection between the company’s declared business turnover and the ₹2.69 crore cash recovered from its office.
Stock Discrepancy Found at Unnao Factory
The company’s factory in Unnao was also searched and its physical stock was verified. According to officials, discrepancies were found between the stock available at the premises and the quantities recorded in the company’s documents. Certain irregularities were also detected in the paperwork.
Based on these discrepancies, the businessman was asked to deposit around ₹53 lakh. The department is now matching the deposited amount with the relevant documents and determining the tax liability arising from the discrepancies. Officials are also examining whether the purchase, sale and supply records correspond with the information reported in the company’s GST returns.
Transactions With Other Firms Also Under Investigation
During the investigation, SGST officials also found information concerning transactions and business relationships involving other firms associated with the company. The scope of the probe has therefore been expanded to examine records of the related firms.
Investigators are trying to determine whether the transactions involved fake billing, tax evasion, wrongful input tax credit claims or other irregularities. The department is also examining the financial trail to establish whether any other businesses or individuals benefited from the alleged discrepancies.
Three departmental teams jointly conducted the operation under the supervision of senior officials. SGST and Income Tax officials were involved in examining financial and business records at the company’s headquarters and factory.
The investigation into the ₹2.69 crore cash recovery, the stock discrepancy of around ₹53 lakh at the Unnao factory and other financial records is continuing. Officials are assessing the company’s actual tax liability and examining whether the transactions point to wider financial irregularities. Further legal action will be taken on the basis of the documents, financial records and other evidence collected during the investigation.
