State tax department officials have uncovered suspected tax evasion amounting to Rs 3.85 crore following simultaneous search operations across eight premises belonging to five pan masala, tobacco, and zarda firms in Kanpur. The coordinated crackdown was initiated after intelligence and initial findings revealed that the entities were claiming undue tax refunds through bogus exports, issuing sales invoices without the actual movement of consignments, and executing unlawful trade transactions. A team comprising 24 officers and staff members drawn from the Special Investigation Branch units of Kanpur Zone I and Zone II conducted the searches, leading to the immediate seizure of vital transaction records, while one trader deposited Rs 35 lakh on the spot. The enforcement drive was directed by senior department leadership, including the Commissioner of State Tax, Uttar Pradesh, Lucknow, Zone I Additional Commissioner Sanya Chhabra, and Zone II Additional Commissioner Grade-1 Kumar Anand, after detailed analysis of departmental portal figures and confidential inputs confirmed substantial discrepancies.
Bogus Invoices and Input Tax Credit Irregularities
During the raid on M&N Enterprises, a pan masala and tobacco trading firm situated in the Harrisganj Cantonment area, authorities discovered that sales bills were made out to several Delhi-based firms without any physical dispatch of merchandise. Although the firm recorded these transactions in its tax filings as sales to GST-registered entities, verification established that the goods were actually sold to unregistered dealers. This arrangement was utilized to pass on undue input tax credit worth Rs 1.34 crore against an artificial business turnover of Rs 4.90 crore without genuine trade. State tax officers also uncovered unrecorded inventory consisting of pan masala, tobacco, and cigarettes valued at Rs 70 lakh, which was placed under seizure, leading to an initial tax evasion assessment of Rs 30 lakh against the establishment.
Phantom Vehicle Movements and Undue Export Refunds
Search teams visiting Harsh Nagar detected widespread irregularities in two registered firms that were seeking undue refund claims by showing fictitious export orders on paper. A technical audit of the vehicle tracking system linked to the official portal revealed no digital proof of vehicular transit for shipments recorded under roughly Rs 4 crore worth of e-way bills generated by the first firm. This absence of genuine movement pointed to an estimated tax avoidance of Rs 1.60 crore. Similarly, the second firm in Harsh Nagar claimed substantial export operations, but its e-way bills worth approximately Rs 3.70 crore lacked corresponding physical transit records on the tracking network, uncovering a further tax evasion of Rs 1.45 crore.
Extensive Stock Discrepancies and On-the-Spot Realization
Substantial variances between digital accounts and physical inventories were discovered during inspections of wholesale trading operations in the older market pockets of the city. At Nayaganj-based Shri Balaji Traders, departmental records showed that stock valued at over Rs 1 crore was supposed to be present on site, yet physical verification found goods worth only about Rs 24.35 lakh. The resulting stock shortfall of Rs 1.26 crore had not been reported or accounted for by the merchant, resulting in tax evasion calculated at Rs 50 lakh. Meanwhile, an inspection at Latouche Road premises of Gupta Ji Enterprises, a zarda and pan masala trading establishment, exposed an inventory difference worth roughly Rs 80 lakh, alongside several incriminating ledgers that were seized by officials. Confronted with the documented anomalies, the proprietor deposited Rs 35 lakh on the spot to clear a portion of the departmental liabilities. Additional Commissioner Sanya Chhabra stated that the operation was executed after evaluating portal metrics alongside sensitive intelligence inputs, successfully confirming multiple crores in tax evasion.
