New Delhi: The Anti-Corruption Branch (ACB) has uncovered an alleged ₹5.50 crore Goods and Services Tax (GST) refund fraud involving officials of the Delhi Government’s Department of Trade and Taxes. Three departmental officials and two private individuals have been arrested for allegedly sanctioning fraudulent GST refund claims by bypassing statutory procedures and relying on forged documents, fabricated verification reports and fake photographs, causing an estimated loss of ₹5.50 crore to the government exchequer.
The arrested accused have been identified as GST Officer Ajit Singh, GST Inspector Atal Bhardwaj, Lower Division Clerk Himanshu Malik, and private individuals Ajay Kumar and Ashish Mishra. The case was registered following a complaint by the Department of Trade and Taxes, which flagged serious irregularities in the processing and approval of GST refund claims.
According to the ACB, the investigation revealed that several refund claims were allegedly approved in violation of statutory provisions and prescribed departmental procedures. Mandatory verification, financial scrutiny and physical inspections were allegedly bypassed, while forged documents and fabricated photographs were used to process refund applications within an unusually short period, resulting in substantial financial loss to the government.
Investigators alleged that the then GST officer approved the refund claims without carrying out the mandatory scrutiny required under departmental rules. The GST inspector is accused of uploading fake photographs and submitting false verification reports without physically inspecting the business premises, thereby facilitating the fraudulent sanction of refund claims.
The financial investigation further revealed that the alleged proceeds of the fraud were layered through multiple bank accounts and shell entities in an apparent attempt to conceal the origin and movement of the funds. According to investigators, part of the alleged proceeds was transferred to the family members of one of the government officials, while a portion of the money was allegedly used to purchase two residential flats in Delhi’s Rohini area.
The ACB stated that, in a first for the agency, properties allegedly acquired using the proceeds of the crime have been attached under Section 107 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) following an order issued by a competent court. Investigators believe the attachment of these assets will strengthen efforts to recover the alleged proceeds of crime and prevent further dissipation of illegally obtained funds.
The investigation remains ongoing, with authorities examining whether additional government officials, private individuals or business entities were involved in the alleged conspiracy. Investigators are analysing digital evidence, banking records, financial transactions, mobile devices and other electronic data to establish the complete money trail and identify the remaining proceeds of the alleged fraud.
Officials are also scrutinising the role of shell entities and intermediary accounts allegedly used to move funds across multiple banking channels. The probe aims to determine the full extent of the conspiracy and identify any beneficiaries who may have knowingly assisted in processing or receiving fraudulent GST refunds.
Experts note that financial crimes involving GST refunds and taxation systems are increasingly characterised by the use of shell companies, forged documentation, identity manipulation and complex fund-layering techniques designed to evade regulatory oversight. They emphasise that robust digital audit trails, risk-based verification, real-time transaction monitoring and advanced data analytics are critical for detecting suspicious refund claims at an early stage.
Commenting on the case, renowned cybercrime expert and former IPS officer Prof. Triveni Singh said organised financial crimes have evolved far beyond conventional document forgery and now exploit digital banking systems, shell companies, money-layering mechanisms and identity fraud to target public revenue. He stressed that real-time data sharing between tax authorities, banks and investigative agencies, AI-powered risk assessment, stronger digital audit systems, multi-layer verification of beneficiaries and prompt examination of suspicious financial transactions are essential to prevent sophisticated economic crimes and safeguard public finances.
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.
