The State Tax Department’s Aligarh zone has uncovered a major racket involving fake firms used to generate fraudulent invoices and pass on input tax credit (ITC). Preliminary findings indicate ITC evasion of nearly ₹100 crore. Four accused from Agra, Mathura and Sadabad have been arrested, while another suspect based in Delhi is being searched.
According to Additional Commissioner Grade-2 Anil Kumar Ram Tripathi, a departmental team raided a firm named SG Traders in Gopi ki Nagariya, Mahavan (Mathura). Although the premises were found locked, documents revealed that the firm was officially registered in the name of Sanjay Patel but was actually being operated by his cousin Manish Patel.
During interrogation, the accused admitted that bogus firms were created to show fictitious purchase and sale of goods on paper, enabling fraudulent ITC claims. The network was active across Uttar Pradesh, Delhi, Punjab and Haryana.
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Rented shops used as operational fronts
Investigators found that a rented shop in Agra had been used to run the fake firm. When summoned, Dev Sharma arrived at the location along with his associate Karan Pengoria, following which a search led to the seizure of a large cache of banking and identity materials.
Officials recovered 80 bank passbooks, 68 ATM cards, 49 cheque books, seven PAN cards, multiple mobile phones and SIM cards. Initial scrutiny also revealed that the property owner’s signatures were missing from the firm’s registration documents, confirming forgery.
Structured roles within the gang
The accused disclosed that each member of the racket had a defined role — some opened bank accounts, others created shell firms, while another group generated fake invoices. They earned a commission of about 30 paise per ₹100 of paper turnover by passing fraudulent ITC through bogus billing chains.
During questioning, the name of Mathura-based Nagesh Gautam surfaced, who in turn referred to a Delhi-based individual, Akshat Kumar. A case has been registered against him and efforts are underway to locate and arrest him.
Accused handed over to police
Following the tax department’s action, the four arrested individuals were handed over to Jamunapar police. Cases under relevant GST provisions have been registered and further investigation is in progress.
Crackdown on ITC fraud networks
Officials said data analytics is being used to track suspicious transactions and identify fake firms involved in ITC fraud. Links of the racket in other states will also be probed.
Experts noted that such schemes cause significant revenue loss to the government and distort fair competition for genuine businesses. The department has urged traders to claim ITC only on actual transactions and avoid dealing with suspicious entities.
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.
