The Anti Evasion wing of the Central Goods and Services Tax department has uncovered an alleged tax evasion network linked to the Dhanshree pan masala business in Uttar Pradesh, detecting GST evasion of about Rs 29.12 crore and arresting two men after a joint operation in Bareilly and Meerut.
Raids Conducted at Five Locations
According to officials, the Anti Evasion branch of CGST Gautam Buddh Nagar received intelligence inputs indicating large scale tax evasion at certain pan masala manufacturing units operating in Bareilly. Acting on those inputs and under directions from senior officers, the department launched a special investigation drive.
Around 25 officers, divided into five teams, carried out simultaneous searches at five locations, including premises on City Station Road in Bareilly. The operation continued from May 13 to May 16. During the searches, officials allegedly found two pan masala packing machines being operated without proper authorisation and outside prescribed tax compliance norms.
Preliminary findings suggested that production carried out through these machines had not been fully disclosed in official tax records, resulting in significant revenue loss to the government.
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Documents and Digital Records Seized
Investigators said large quantities of business documents, digital data, financial records and other electronic evidence linked to commercial transactions were seized during the raids. Officials suspect the case may involve a systematically organised tax evasion mechanism rather than isolated irregularities.
Authorities are now examining whether other business entities or parts of the supply chain were also involved in the alleged network. The seized material is being scrutinised to determine the gap between actual production and officially declared output, as well as the extent of products that may have been supplied to the market without proper disclosure.
The department is also conducting a forensic examination of production records, GST returns, supply chain data and banking transactions spanning several years.
Two Arrested, Probe May Widen
Among those arrested, Jagdish Chandra Agrawal has been identified as a partner in the company, while Gopal Saxena allegedly handled accounting and financial operations. Both were detained from Bareilly on Saturday morning and later produced before a special court in Meerut.
Based on the evidence presented, the court sent both accused to judicial custody for 10 days. Officials said the investigation remains ongoing and further action may follow after a detailed examination of the seized records and digital material.
Investigators are also examining whether shell firms or fake invoicing networks were used to facilitate the alleged evasion. The department believes the electronic evidence recovered during the searches could reveal further links involving suppliers, distributors, transport channels and associated financial 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.
