Daijiworld Media Network - Lucknow
Lucknow, Aug 25: The Enforcement Directorate (ED) has seized Rs 3.8 crore in unaccounted cash during searches at 11 premises in Uttar Pradesh and Haryana in connection with an alleged GST fraud that caused a loss of Rs 27.02 crore to the government, an official said on Tuesday.
The ED's Lucknow Zonal Office conducted the searches on Monday under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.
Besides the cash, the agency seized incriminating documents and digital devices during the searches.
According to the ED, the case relates to the alleged fraudulent utilisation and passing on of fake Input Tax Credit (ITC) without any actual supply of goods or services.
The ED initiated its investigation based on an FIR registered by the Uttar Pradesh Police under various provisions of the Indian Penal Code, 1860, which are scheduled offences under the PMLA.
The agency said the accused company and its directors allegedly fraudulently availed and passed on ITC using fabricated invoices and forged e-way bills, despite there being no actual supply or receipt of goods.
"This caused wrongful loss to the Central government exchequer to the tune of Rs 27.02 crore," the ED said in a statement.
The agency further alleged that forged consignment shipment challans were prepared in a pre-planned manner by the company to obtain fake ITC and cause financial loss to the government.
The investigation revealed that the company allegedly availed and passed on fake ITC worth around Rs 10.28 crore during the 2018-19 financial year through a network of non-existent and bogus entities.
According to the ED, funds received from beneficiary firms were transferred to these entities on the same day, layered through multiple bank accounts and eventually withdrawn in cash.
During the searches, officials analysed recovered documents and recorded statements of key persons, including beneficiaries. The statements and documents reportedly revealed that the network involved in the alleged fake ITC transactions extended to several other units, the agency said.