In a significant development in India’s fight against financial fraud, the Enforcement Directorate (ED) has filed a detailed chargesheet against four individuals, alleging their central role in a massive Goods and Services Tax (GST) scam valued at approximately Rs 730 crore (about $87 million USD). The case reveals an intricate operation involving shell companies, fabricated transactions, and illegal tax benefits, underscoring the challenges faced by tax authorities.
The Allegations: A Web of Deceit and Fake Companies
At the heart of this sprawling financial deception are Shiv Kumar Devra, identified by investigators as the mastermind, along with his son Mohit Devra, Amit Gupta, and Amit Agarwal, also known by his alias Vicky Bhalotia. These four individuals are accused of establishing and operating 135 “paper companies” – entities that existed solely on official records without any genuine business activities.
Through these phantom firms, the accused allegedly created a facade of trade worth a staggering Rs 5000 crore (approximately $600 million USD). The primary objective of this elaborate scheme was to unlawfully claim Input Tax Credit (ITC). ITC is a mechanism that allows businesses to offset the tax paid on their purchases against the tax payable on their sales. By generating fake bills and showing non-existent transactions, the alleged fraudsters were able to claim substantial tax credits, effectively siphoning off vast sums from the government’s tax revenue. Investigations also revealed that while fake directors were appointed to these shell companies, the accused maintained ultimate control over all operations.
The Unraveling: Coordinated Raids and Key Arrests
The intricate fraud first came to light in 2023, when the Directorate General of Goods and Services Tax Intelligence (DGGI) initiated an investigation, uncovering a Rs 734 crore GST scam linked to these traders through their use of fake bills. Following the DGGI’s initial findings, the ED stepped in, focusing on the money laundering aspects of the case.
A series of coordinated raids were conducted by the ED on May 8 across key locations, including Ranchi, Jamshedpur, and Kolkata. These operations proved pivotal, leading to the apprehension of the alleged perpetrators. Amit Agarwal alias Vicky Bhalotia was arrested in Jamshedpur, while Shiv Kumar Devra, Mohit Devra, and Amit Gupta were taken into custody in Kolkata. The arrests marked a significant breakthrough in dismantling the alleged criminal network.
Seized Assets: Tracing the Laundered Funds
During the extensive raids, authorities successfully seized a variety of assets believed to be the proceeds of the illicit activities. This included Rs 9 lakh in cash found at various locations. Furthermore, a substantial sum of Rs 63 lakh was frozen in the bank accounts associated with the 135 shell companies, directly linking the financial assets to the fraudulent ITC claims.
Perhaps most significantly, immovable property valued at Rs 5.30 crore (approximately $630,000 USD) was also seized. These properties are believed to have been acquired through the extensive money laundering operations, providing tangible evidence of the scale of the financial crime. The chargesheet details how these assets were allegedly obtained and laundered through the sophisticated network of fake transactions.
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Ongoing Legal Battle and Future Steps
With the chargesheet now filed, the legal proceedings against the four accused are set to intensify. The document lays out the comprehensive evidence and specific charges against Shiv Kumar Devra, Mohit Devra, Amit Gupta, and Amit Agarwal.
The broader investigation also touched upon other figures, such as Vivek Narsaria. The DGGI had claimed a recovery of Rs 14 crore from Narsaria, and while attempting to arrest him, he reportedly disappeared. A subsequent dispute led the High Court to transfer the investigation of Narsaria’s alleged irregularities to the state government. In response, the DGGI has challenged this decision by filing a petition in the Supreme Court, where the matter is currently under review.