In a major breakthrough in a multi-crore Goods and Services Tax (GST) evasion case, Uttar Pradesh Police have detained eight persons from the Nirsa region of Dhanbad district in Jharkhand, following an investigation linked to a case registered at Auraiya Kotwali police station.
The arrests were made after three days of sustained raids across Nirsa and surrounding areas, where teams from Auraiya police conducted coordinated operations. Officials said the accused were allegedly involved in the creation of fake companies used to siphon off tax revenue by fraudulently claiming GST benefits.
The case traces its origin to a complaint filed on July 30, 2025, by Veeri Singh, a State Tax Officer posted in Etawah district, who flagged suspicious GST transactions and possible tax evasion involving shell entities.
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Those detained have been identified as Umesh Malakar, Shyam Sundar Paswan, Pradeep Sharma, Anil Sharma, Kanhai Saw, Anjeet Thakur, Ganesh Bauri, all residents of Bangalpada under the Nirsa police station limits, and Bablu Rajak, a resident of Bhaljoriya Road.
Investigators said preliminary findings suggest that the accused belong to economically modest backgrounds, with some working as daily wage labourers, auto-rickshaw drivers or small vendors selling tobacco products. Police said this socio-economic profile became a key focus of the investigation as the case unfolded.
According to officials familiar with the probe, the accused were allegedly induced to hand over their Aadhaar cards, PAN cards and voter identity documents after being promised employment opportunities. These documents were later misused to register multiple fictitious firms under their names, which were then utilised to conduct fraudulent GST transactions.
Police sources said the accused claimed they were unaware that companies had been registered in their names or that their identities were being used for tax evasion. Investigators are examining whether the individuals acted as knowing participants or were exploited as fronts by larger operators.
A significant lead in the case centres around Shyam Sundar Paswan of Mathan, who, according to statements given by the detained individuals, allegedly played a key role in orchestrating the scheme. The accused told police that Paswan had promised to set up a mustard oil mill under the banner of a cooperative society, assuring them of steady employment.
They were allegedly told that until the unit became operational, they would be paid ₹5,000 per month. Police said the payments were reportedly made in cash for nearly a year, which helped build trust and prevented suspicion.
“When the payments stopped, they began asking for their documents back. By then, multiple fake firms had already been floated using their identities, and GST evasion had been carried out,” an investigator said.
Officials said this modus operandi highlights a growing trend where identity documents of vulnerable individuals are misused to set up shell companies, making detection difficult while shielding the actual masterminds.
The Auraiya police are now coordinating with GST authorities to map the financial trail, identify the beneficiaries of the tax fraud, and determine the total quantum of revenue loss. Bank accounts, transaction records and digital registration data linked to the fake firms are being scrutinised.
Police said further arrests cannot be ruled out as the investigation progresses. Authorities are also examining whether similar networks are operating in other districts using the same method.
The case underscores the increasing complexity of GST-related frauds and the need for stronger safeguards to prevent misuse of identity documents, especially among economically weaker sections.
Officials urged citizens to exercise caution while sharing personal documents and warned that even unintentional involvement could have serious legal consequences.
The detained individuals are expected to be produced before a court after completion of initial formalities, while the investigation into the alleged GST evasion racket continues.
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.
