Uttar Pradesh | The investigation into an alleged Goods and Services Tax (GST) evasion running into nearly ₹100 crore has gathered momentum in Uttar Pradesh, with enforcement agencies widening the scope of inquiry to examine the suspected role of a central indirect tax official. A departmental inquiry has been initiated, while the Special Task Force (STF) continues its search for key links in the suspected network operating across multiple States.
The case originates from a major tax evasion complaint registered in the Ghaziabad region, where it is alleged that a web of fake and dormant firms was used to fraudulently claim and pass on input tax credit. Investigating agencies say the evasion was carried out in an organised manner, involving coordinated documentation, layered transactions and the misuse of statutory processes.
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Questions over revival of dormant firms
Preliminary findings indicate that several firms, which had earlier been suspended or rendered inactive due to compliance failures, were allegedly restored through questionable procedural clearances. These entities were then used to generate fictitious invoices and paper transactions, enabling large-scale tax diversion without corresponding movement of goods or services.
Sources familiar with the investigation said the circumstances under which these firms were reactivated have raised red flags, prompting a closer look at possible internal lapses or complicity. Based on these inputs, the central tax department has ordered an internal inquiry to ascertain whether established norms were bypassed during the restoration process.
The inquiry aims to determine whether approvals were granted in violation of rules and whether due diligence mechanisms were compromised.
STF action reveals interstate network
Several accused linked to the racket have already been taken into custody in earlier phases of the probe. Interrogation and examination of seized records have reportedly revealed the contours of an interstate syndicate operating through shell companies registered in different jurisdictions.
Teams of the Special Task Force are continuing coordinated operations to trace remaining suspects and financial trails. Officials said digital evidence, banking records and GST portal data are being analysed to reconstruct the flow of funds and identify beneficiaries of the alleged fraud.
Investigators believe the network relied on rapid creation and closure of firms, coupled with fabricated compliance filings, to evade detection over an extended period.
Departmental inquiry widened
As part of the departmental proceedings, records linked to the concerned official’s past assignments have been sought. The review includes an examination of cases in which suspended or high-risk firms were reinstated over the past few years, and whether such decisions were supported by documented verification.
Officials said the inquiry would not be confined to a single individual if evidence points to systemic failures or broader involvement. Any violation of service conduct rules or statutory provisions could invite disciplinary action, independent of criminal proceedings.
Revenue loss and systemic concerns
Tax experts note that cases involving fraudulent input tax credit pose a serious threat to the integrity of the GST framework. Apart from causing substantial revenue loss to the exchequer, such practices undermine trust in compliance systems and distort fair market competition.
Authorities have acknowledged that fake invoicing and paper-based transactions remain among the most complex challenges in GST enforcement, particularly when aided by insider knowledge or procedural loopholes.
In response, enforcement agencies are increasingly relying on data analytics, risk-based audits and inter-agency coordination to detect anomalies early and prevent recurrence.
Investigation ongoing
Officials stressed that the investigation remains at an evolving stage and that further questioning and forensic examination of records could bring additional firms and transactions to light. The STF and tax authorities are working in coordination to ensure that the entire network is mapped and brought within the legal framework.
They reiterated that any individual found complicit in facilitating tax evasion, regardless of position or affiliation, would face strict action under applicable laws. The agencies have maintained that the probe will be pursued to its logical conclusion to safeguard revenue interests and reinforce confidence in the tax administration.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
