SUMAN K SHRIVASTAVA
Ranchi, August 6: The Jharkhand High Court has refused to enlarge a Jamshedpur man allegedly involved in a GST fraud case of Rs. 781.39 crores.
He has also been accused of being involved in a large-scale fake GST invoice scam.
Fake and bogus firms
Observing that Sumit Gupta is a white-collared criminal, a bench of Justice Subhash Chand, said, “Even an ordinary person of the country is paying CGST & SGST of central and state government for the building and development of nation and state but the persons like petitioner who is white-collar criminals impede and obstruct the development of nation and state as well by creating fake and bogus firm committing forgery in a well-planned manner in cool calculation and dishonest design with a vulture eye on personal profit causing huge loss of public funds, affects the economy of nation and state, should be dealt with a different approach to sending the eye-opening message to such white-collar criminals of society.”
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The Directorate General of Goods and Services Tax officers arrested Gupta on April 8 this year from his residential house in Kolkata.
Excal Enterprises & Navya Commercial
Sumit Gupta, the proprietor of M/s Excal Enterprises and the Director of M/s Navya Commercial Pvt Ltd, has been accused of being the mastermind behind the creation, operation and management of 135 bogus firms and was engaged in the issuance of bogus GST invoices valuing approx. Rs. 5122 crores without an actual supply of goods for availing and passing on inadmissible/ irregular ITC to the end-availers leading to a loss of over Rs. 781.39 crores to the government exchequer.
The other scam
Justice Subhash Chand said that Gupta used to manage ground-level office work taking offices on rent and making digital signatures of the directors etc. The multiple offices were opened in Kolkata as well as in Jharkhand and recruited needy/ poor/ gullible persons offering jobs in his office. To hire staff, they arranged fake interviews of the economically poor people/ needy people (mainly during the Covid pandemic and thereafter) in the name of offering jobs of accountant/receptionist/ data entry/ postman etc. and called for their credentials like PAN card, Aadhar Card and photo etc. He engaged several agents through which jobless boys/ girls were contacted by him.
The court also noted that Sumit Gupta also used online platforms like workindia job, LinkedIn etc. for that purpose. “Whoever contacted him, he offered a job after taking the false interview and trapped as many boys and girls as possible enticing them to increase salary and promote them by getting KYC details, opening bank accounts with them for the creation of bogus firms/ companies and paying them small pecuniary benefits during the creation of firms. The petitioner operates these firms for a few months and thereafter gets them cancelled by submitting a letter to the GST Department,” the court order added.
The GST investigation further revealed that these firms fraudulently availed fake input credit and passed it on to various other firms, causing a significant loss to the government exchequer.
No actual business activities were conducted
The court observed that there was verified material on record, including statements from individuals associated with these fake firms, indicating that no actual business activities were conducted.
“Many of these individuals were unaware that GST registration had been taken in their names and that they were listed as directors or proprietors of the bogus firms,” the court order said.
“As such, it is evident that Sumit Gupta without knowledge of so-called directors, proprietors and other staff of the company had used to pass
inadmissible and indelible input tax credit to various firms without a supply of underlying goods/ services. The irregular input tax credit based on invoices was issued by fictitious/ fake suppliers without actual supply of goods for services, leading to the wrongful availment or utilization of input tax credit and passing thereof which resulted in a huge loss in revenue to the government,” Justice Chand concluded.
