The State Intelligence Branch (SIB) of the State Tax Department has unearthed a major fake Input Tax Credit (ITC) racket in Mathura, with links extending to Aligarh and several other districts. Four accused have been arrested for allegedly operating bogus firms from rented shops and generating fake invoices to pass fraudulent ITC across multiple states.
Data analysis led to breakthrough
Officials said the network came to light during an SIB probe in Aligarh. Months of surveillance and data analytics helped trace the syndicate to SG Traders in Mahavan, Mathura, where a rented shop was being used as a front for paper-based trading.
During the raid, authorities recovered:
- 80 bank passbooks
- 68 ATM cards
- 49 cheque books
- 7 PAN cards
- Multiple mobile phones and SIM cards
- Rent agreements and keys to several premises
Preliminary scrutiny of the passbooks revealed transactions worth hundreds of crores, indicating large-scale circular trading and ITC fraud.
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Well-structured syndicate with defined roles
Investigators said each member of the gang had a specific function:
- Procuring PAN, Aadhaar and bank documents
- Opening GST registrations and bank accounts
- Creating shell firms using forged documents
- Identifying closed or vacant shops for fake business addresses
Fake purchase and sale invoices were generated to pass ITC without actual movement of goods, causing substantial loss to the exchequer.
Arrested accused and modus operandi
Those arrested include Nagesh Gautam (Mathura), Karan Pengoria (Agra), Dev Sharma (Agra) and Prashant (Mathura). They allegedly operated the network under instructions from a Delhi-based mastermind, Akshat Kumar, who remains absconding.
The accused used a Hyundai Verna to transport documents and banking materials. Officials said they were lured with commissions of 30 paise per ₹100 turnover or fixed monthly payments of ₹70,000–₹80,000.
Aligarh firms now under scrutiny
Cheque books and documents of firms from Aligarh and other districts were found in the possession of the accused. Authorities are now examining these entities to determine whether they were complicit or their credentials were misused.
The seized documents have been brought to the Aligarh headquarters for detailed forensic and financial analysis. Officials indicated that more names are likely to emerge as the investigation progresses.
Multi-state tax evasion network
According to SIB, the syndicate created shell firms using forged documents and routed fake transactions across Uttar Pradesh, Delhi and other states, enabling fraudulent ITC claims and large-scale tax evasion.
Further action underway
All four accused have been handed over to Jamunapar Police in Mathura for legal proceedings under GST-related provisions. A case has also been registered against the Delhi-based kingpin, and efforts are on to track him down.
Senior officials described the operation as one of the largest SIB actions in the region, adding that the state government has taken note of the crackdown. Further investigations are expected to uncover additional firms and financial trails linked to the racket.
About the author – Rehan Khan is a law student and legal journalist with a keen interest in cybercrime, digital fraud, and emerging technology laws. He writes on the intersection of law, cybersecurity, and online safety, focusing on developments that impact individuals and institutions in India.
