A ₹1.47 crore GST evasion notice in Uttarakhand has led to the exposure of a much larger inter-state hawala network involving transactions worth ₹23.65 crore. Bareilly police have busted the organised racket that laundered black money through bogus firms, arresting two accused, while the Shahjahanpur-based gang kingpin remains absconding. Investigators suspect links extending across Uttarakhand, Bareilly, Badaun, Shahjahanpur and even Nepal.
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GST Notice Triggers the Breakthrough
The case surfaced after the GST department in Haldwani issued a notice of ₹1,47,56,888 to Shabbu, a resident of Kesar Pur village under Bhuta police station, over suspicious transactions and ordered the freezing of his bank account. The notice left Shabbu shaken, as he is a zari artisan and daily-wage labourer with no knowledge of any business running into crores of rupees in his name. He subsequently approached Bhuta police, triggering an investigation that exposed the entire hawala network.
‘Mule Accounts’ Opened in a Labourer’s Name
Police investigation revealed that in 2022, a villager named Shahid allegedly lured Shabbu with promises of expanding his business, obtained his documents and facilitated the opening of two bank accounts. The passbooks, cheque books and debit cards of these accounts were retained by the accused. Such accounts, police said, are commonly referred to as mule accounts, used for illegal financial transactions.
One of these was a current account at HDFC Bank, which recorded transactions worth ₹23.65 crore between 2022 and 2025. According to investigators, the account was operated by Amit Gupta, a resident of Kankartola locality under Baradari police station.
Hawala Disguised as Mentha Trade
The probe further revealed that Amit Gupta built an elaborate hawala setup under the guise of mentha oil trading. To project the transactions as legitimate, he registered around 12 bogus firms in his own name and those of close relatives. These included Satya Sahab in Bhuta, Mahavir Traders in Dataganj (Badaun), Mahakal Traders in Tilhar under his cousin Vijay’s name, and Sumit Traders on Padera Road in Faridpur under another cousin, Sumit. Police have so far identified about 12 such firms, all of which are under detailed scrutiny.
Fake Bills and Paper Transactions
Police recovered several forged bills linked to mentha trade from the accused. One bill showed 12 drums of mentha oil valued at ₹31 lakh, another listed 19 drums worth ₹47 lakh, while a third bill amounted to ₹65 lakh without specifying the quantity of mentha oil. Investigators said paperwork projected large-scale mentha trading, but no evidence of any actual business activity was found at any of the registered firms.
Uttarakhand Link and Call Detail Analysis
Police said the Uttarakhand connection in the hawala operation is now clearly established. Links to other districts in the Bareilly range—Badaun and Shahjahanpur—have also emerged, along with the possibility of cross-border connections extending to Nepal. To uncover the full chain, investigators are analysing the call detail records (CDRs) of the arrested accused to trace contacts, money trails and additional operatives.
A Familiar Hawala Pattern
According to the Future Crime Research Foundation (FCRF), such cases follow a well-established pattern in hawala operations. Economically vulnerable individuals are often used as fronts by opening accounts and firms in their names, while the real operators remain hidden. When investigations begin, the account holder is usually the first to face legal trouble, despite being merely a pawn.
Kingpin Absconding, Two Accused in Jail
Interrogation revealed that the racket was allegedly masterminded by Neetu, a Shahjahanpur-based hawala operator who is currently on the run. Amit Gupta admitted that the transactions were carried out on Neetu’s instructions to convert black money into white. Bhuta police arrested Shahid and Amit Gupta, produced them before the court, and both have been sent to judicial custody.
Scale of Network Raises Alarm
Police officials said the evidence of ₹23.65 crore routed through a single account clearly indicates that the hawala operation is far larger in scale. Further arrests are likely, and tax authorities and enforcement agencies may be brought in to expand the probe.
Public Advisory
Police have urged citizens not to open bank accounts or firms at someone else’s behest. In such cases, legal liability ultimately rests with the account holder, even if they claim ignorance of the transactions.
The case once again underscores how hawala networks and bogus firms exploit vulnerable sections of society to launder illicit money—and why timely awareness and caution remain the strongest safeguards against such financial crimes.
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.
