A major case of suspected GST evasion has surfaced after the State Tax Department busted a network of seven bogus firms allegedly operating in the name of timber trade. Investigators say the entities collectively showed a turnover of nearly ₹100 crore, while evading roughly ₹20 crore in taxes through fraudulent billing and input tax credit claims.
The racket came to light a few days ago when a mobile enforcement team intercepted two trucks loaded with timber on the Rampur Highway. During inspection, officers found that the e-way bills accompanying the consignment were forged — leading to a deeper probe that began to unravel the larger network.
Final Call: FCRF Opens Last Registration Window for GRC and DPO Certifications
Network traced to Sitapur, Hardoi and other districts
Preliminary investigation revealed that firms such as Bharat Enterprises, Jara Rolex in Sitapur, and Jogeshwar and Chaudhary Traders in Hardoi — among a total of seven entities — existed largely on paper.
Multiple bank accounts across five different banks were opened in the names of these firms. Money movement shown through these accounts was allegedly used to claim Input Tax Credit (ITC) on transactions that never truly took place.
Officials say the group generated bills on the pretext of supplying timber from Sitapur and nearby areas all the way to Haryana, creating a seemingly legitimate trail of trade.
Changing names, fake registrations — and no real business
Investigators have found that different mobile numbers, addresses and identities were used to obtain several firm registrations.
- Some firms had no physical address
- Some existed only on paper
- Others were listed under rented premises
Several people linked to earlier cases of bogus billing are believed to be connected to this network as well. According to officers, the masterminds created shell entities and projected crores worth of paper transactions, without genuine movement of goods.
Links stretch to Uttarakhand and beyond
The investigation also points to links extending into Jaspur and Kashipur in Uttarakhand, where bills were allegedly generated and circulated further.
In some instances, firms were registered in the names of individuals who had no knowledge of the business at all — including a rickshaw puller, in whose name transactions worth nearly ₹5 crore were shown.
Old cases resurface; multiple FIRs already filed
Authorities say several FIRs connected to members of this syndicate had been registered in the past.
- Vehicles seized
- Fraudulent ITC claims cancelled
- Bank transactions placed under scrutiny
The department has also initiated the process to reverse wrongfully claimed ITC, aiming to recover lost government revenue.
How the tax evasion worked
According to investigators, the modus operandi followed a predictable pattern:
1. First, a bogus firm was registered.
2. Fake e-way bills were generated in the name of timber movement.
3. Paper transactions were created to show supply.
4. On that basis, GST ITC was claimed.
In many cases, officials believe the goods never actually moved — only bills did.
What lies ahead
Authorities have compiled details of bank accounts, mobile connections, e-way bills, GST returns and suspicious transactions.
After the data is fully examined, more criminal cases are likely to follow, and officials say additional names may emerge as the investigation progresses.
