A significant GST evasion scam has come to light in Dhanbad, with ‘Sona & Associates’ under investigation for allegedly using fake invoicing mechanisms to facilitate black marketing of coal and evade taxes. The State Tax Department has issued notices to multiple companies involved in the transaction chain and has begun proceedings to recover unpaid Goods and Services Tax (GST).
Preliminary findings suggest that Sona & Associates sold coal to several firms using falsified invoices, creating a paper trail that appeared compliant while enabling large-scale tax evasion. These transactions reportedly bypassed proper tax channels, causing substantial revenue loss to the government.
Tax Recovery Process Initiated Against Buyer Firms
According to officials, notices have been issued to the companies that purchased coal from Sona & Associates. These firms are now subject to detailed scrutiny under the GST framework. Authorities are examining their tax returns, invoice matching records, and Input Tax Credit (ITC) claims.
“A pattern of generating invoices without actual movement of goods has been identified. It is a classic modus operandi for GST fraud,” an official from the State Tax Department confirmed. “We have initiated action against all associated entities and begun the recovery process.”
Coal Trade as a Front for Tax Manipulation
Coal, a high-demand commodity in the region, has long been vulnerable to black-market operations. This scam reportedly involved inflating coal prices on paper, underreporting actual supply, and claiming fraudulent input credits. Investigators suspect the total value of evasion could run into several crores.
Legal experts indicate that provisions under the GST Act may lead to heavy penalties, and in severe cases, even arrest. If criminal intent is established, the accused parties may also face charges under the Indian Penal Code.
The development has raised concerns over the loopholes in invoice-based transactions, particularly in resource-rich zones like Dhanbad. The State Tax Department has hinted at further investigations into similar transactions in the region.
The incident underscores the urgent need for stronger compliance checks and real-time tracking systems to curb tax fraud in critical sectors like coal.
About the Author – Anirudh Mittal is a B.Sc. LL.B. (Hons.) student at National Forensic Sciences University, Gandhinagar, with a keen interest in corporate law and tech-driven legal change.