GST refund fraud: Three Delhi tax officials among five held in Rs 5.5 crore scam

Three officials of the Delhi government’s Department of Trade and Taxes and two private persons have been arrested over an alleged GST refund fraud involving wrongful refunds of around Rs 5.50 crore, the Anti-Corruption Branch (ACB) said on Tuesday.

The accused have been identified as GST Officer Ajit Singh, GST Inspector Atal Bhardwaj, Lower Division Clerk Himanshu Malik, and private persons Ajay Kumar and Ashish Mishra, ACB said in a statement.

According to the ACB, the case was registered on a complaint from the Department of Trade and Taxes over alleged irregularities in the processing and sanction of GST refund claims.

The investigation revealed that the refunds were allegedly sanctioned in violation of statutory provisions and prescribed departmental procedures.

Mandatory verification and financial scrutiny were bypassed, while fabricated documents and fake photographs were allegedly used to process the claims in an unusually short period, causing a wrongful loss of about Rs 5.50 crore to the government exchequer, the statement read.

The probe found that the then GST officer allegedly approved the refund claims without carrying out mandatory scrutiny, while the GST inspector allegedly uploaded fake photographs and submitted false verification reports without physically inspecting the business premises, facilitating the fraud, it read.

Financial investigation further uncovered alleged layering of the fraud proceeds through multiple bank accounts and shell entities, according to the ACB.

The ACB said part of the alleged proceeds of crime was transferred to family members of one of the accused government officials and was used to purchase two flats in Delhi’s Rohini area.

In a first for the ACB, properties allegedly purchased using the proceeds of crime have been attached under Section 107 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) following an order of a competent court, it said.

The investigation is underway to identify other persons involved in the conspiracy, trace the remaining proceeds of crime and examine digital and financial evidence, the ACB added.