CID Investigates Rs 1,400 Crore GST Fraud Case Involving Former Chief Secretary Somesh Kumar
By: Admin|July 31, 2024|Categories: GST Recent News
In a significant development in the realm of tax fraud investigations, the case of an alleged Goods and Services Tax (GST) fraud involving nearly Rs 1,400 crore has been escalated to the Crime Investigation Department (CID). The investigation targets former chief secretary Somesh Kumar and four others, including an IIT Hyderabad assistant professor and several officials from the commercial tax department. Official orders for this transfer are expected to be issued shortly, according to reliable sources.
The Allegations
The accused officials in the commercial tax department are alleged to have concealed critical information related to Rs 10,000 crore belonging to various companies. Although the precise motives behind these actions remain unclear, officials suspect that the state exchequer may have incurred losses amounting to approximately Rs 10,000 crore. The CID investigation is anticipated to shed more light on the details of this complex case.
Involvement of Major Companies
Sources within the department indicate that the case involves allegations of tax evasion spanning multiple states, affecting as many as 75 taxpayers. This list includes prominent entities such as the Telangana State Beverages Corporation Limited, which adds a layer of complexity to the investigation.
Recent Developments
The CID transfer comes in the wake of former chief secretary Somesh Kumar being named accused number five in a complaint filed by the commercial taxes department. This complaint was officially lodged on July 26 by K Ravi Kanuri, the joint commissioner of the Central Computer Wing. The allegations suggest that Kumar, alongside two senior commercial tax officials—SV Kasi Visweswara Rao and A Siva Rama Prasad—was involved in an input tax credit scam in collaboration with IIT Hyderabad assistant professor Sobhan Babu and Plianto Technologies, a private firm.
Role of WhatsApp in the Scam
A key element in the investigation is the establishment of a WhatsApp group named “Special Initiatives,” allegedly created under the supervision of Somesh Kumar. According to the FIR, the chat history from this group played a pivotal role in the fraud. The inquiry revealed that reports estimating the Integrated Goods and Services Tax (IGST) loss were generated, and directives were issued not to cancel registrations, even in cases involving fraud.
The fraud first came to light following a Rs 25.51 crore GST scam involving Big Leap Technologies and Solutions Private Limited. This entity reportedly passed on input tax credit worth Rs 25.51 crore without actually remitting any tax to the government, triggering a deeper investigation by the commercial taxes department.
Discrepancies and Forensic Reports
Upon reaching out to IIT Hyderabad, which had been engaged as a service provider for the development of software for the commercial taxes department, officials discovered that the institution had failed to submit proper discrepancy reports. A subsequent investigation led to the discovery that the operations related to the commercial taxes department were allegedly conducted under the guise of Plianto Technologies Private Limited.
Compounding the issue, Plianto Technologies reportedly denied having developed any software for the commercial taxes department, leading officials to initiate a forensic audit. This audit revealed potential unauthorized transfers of proprietary data belonging to the commercial taxes department to third parties.
Statements from Key Individuals
During the course of the investigation, Sobhan Babu, the IIT-H assistant professor, was interrogated. He claimed that software changes were made based on oral instructions from high-ranking officials, including the former Special Chief Secretary of Revenue (CT), Additional Commissioner (ST), and other departmental leaders. His involvement in the WhatsApp group, where directives were allegedly provided for software modifications, has raised further concerns about the extent of the conspiracy.
Forensic Evidence and Legal Actions
Following the forensic audit, the commercial taxes department generated several reports indicating that the accused individuals had actively manipulated taxpayer data to favor specific entities, resulting in substantial losses to the state exchequer. Armed with this complaint and technical evidence, law enforcement authorities registered a case under multiple sections of the Indian Penal Code (IPC), including 406 (criminal breach of trust), 409 (criminal breach of trust by public servant), and 120 B (criminal conspiracy), along with Section 65 of the Information Technology Act, addressing tampering with computer source documents.
Conclusion
The case surrounding the alleged GST fraud involving former chief secretary Somesh Kumar and others is unfolding as a major scandal with far-reaching implications for the state’s financial integrity. The transfer of the investigation to the CID signals the seriousness of the allegations and the potential for significant repercussions. As the inquiry progresses, it remains crucial for all stakeholders to remain vigilant and ensure accountability in public service.
The outcome of this investigation will not only affect those directly implicated but also set a precedent for how such fraud cases are handled in the future. The potential recovery of losses to the state exchequer and restoring public trust in the tax administration will be paramount.
Stay tuned for further updates as the investigation develops.
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