Kanpur. The SGST department has taken major action against two firms operated by a husband and wife from the same business premises in Defense Colony, Kanpur.
An investigation by the Special Investigation Branch (SIB) has allegedly uncovered bogus input tax credit (ITC) claims exceeding ₹2.25 crore through the two firms. Following the findings, the department has blocked ITC worth ₹86.19 lakh. In addition, ₹47.31 lakh has been deposited into the government account through DRC-03 by the trader concerned. Officials are now examining transactions involving the two firms and their suppliers to determine the wider extent of the alleged irregularities.
Two Firms Registered at the Same Address
The investigation was initiated at Merit Exim, a firm operated by Taimur Alam, following directions from senior commercial tax officials. A team from SIB Range-D conducted the inquiry at the firm’s premises in Defense Colony, Jajmau. During verification, investigators found that another firm named Peace Leather was also registered at the same address. The firm is operated by Ayesha Zafar, who is the wife of Taimur Alam.
The common business address prompted officials to examine the registration details, GST filings, purchase and sales records and ITC claims of both firms in greater detail.
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Over ₹2.25 Crore in Alleged Bogus ITC
A detailed examination of records available on the GST common portal and transaction documents revealed substantial ITC claims by both firms. Merit Exim allegedly claimed bogus ITC worth ₹49.37 lakh during 2024-25 and another ₹75.68 lakh during 2025-26. The combined amount exceeds ₹1.25 crore over the two financial years.
Officials found that the firm had allegedly adjusted its entire tax liability through ITC and had not deposited any amount in cash against the liability. Following the investigation, ₹47.31 lakh was deposited by the trader through DRC-03.
The second firm, Peace Leather, allegedly availed bogus ITC worth ₹1.87 crore during 2024-25, 2025-26 and 2026-27. The department has blocked ₹38.88 lakh of ITC associated with the firm. With the action against both firms, the total ITC blocked by the department stands at ₹86.19 lakh.
Purchases Linked to Cancelled Firms Under Scanner
During questioning, Taimur Alam allegedly told investigators that bills and supplies had been shown through three firms that had already been cancelled. The transactions were allegedly facilitated through a Jajmau resident identified as Saddam.
The department has now expanded its investigation to examine the complete transaction trail involving the three cancelled firms. Officials are comparing purchase invoices, ITC claims and records of actual movement of goods to establish whether the transactions represented genuine supplies or were used only for generating tax credit.
Investigators are also examining the role of other businesses and individuals that may have been connected to the transactions. Officials said the exercise will focus on matching the invoices with actual goods supplied and determining whether the firms from which purchases were shown had the capacity and records to conduct the reported transactions.
The department is expected to take further action based on the findings of the expanded inquiry. The investigation will also seek to establish the flow of ITC between the firms and identify any additional entities that may have benefited from the alleged bogus billing network.
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