GST Fraud: Kingpin’s bail rejected after high drama in Mumbai court, 8 more arrested

Tax officials Friday arrested eight more offenders in the ongoing crackdown against the use of fake GST invoices taking the total number of arrests to 104. GST investigation officials have so far filed over 1,100 cases against more than 3,400 bogus entities having GST registration number, reports ETV Bharat's Deputy News Editor Krishnanand Tripathi.

Hyderabad: In the ongoing pan-India drive against the use of fake GST invoices, tax officials Friday arrested eight more offenders, taking the total number of arrests to 104 within three-weeks of the launch. The crackdown has seen arrests of several masterminds and kingpins, including the son of a powerful Maharashtra MLA whose bail plea was rejected by a Mumbai Court on Thursday. GST officials Friday conducted raids in 38 cities across the country, filed 65 fresh cases and busted 114 bogus entities having GST registration, ETV Bharat has learnt.

With the arrest of 8 more persons on Friday, officials of the Directorate General of GST Intelligence (DGGI) have so far arrested a total 104 people in one of the biggest drive against tax evaders, booked 1,161 cases against 3,479 bogus entities having GST registration that were involved in illegally claiming input tax credit and circular trading under the GST.

Mumbai kingpin fails to secure bail

According to official sources, the nationwide drive against GST frauds has resulted in arrest of some bigwigs such as Mumbai businessman Sunil Ranakar Gutte who is managing director of Sunil Hi-tech and son of Maharashtra MLA Ratnakar Gutte.

Sunil’s father Ratnakar Gutte is a sugar baron and MLA from Gangakhed assembly seat in Maharashtra. His brother Vijay Gutte directed the movie The Accidental Prime Minister based on the life of former Prime Minister Dr Manmohan Singh.

According to officials, Sunil Gutte, who along with his business associate Vijendra Ranka, is accused of committing a Rs 520 crore GST fraud, made frantic attempts to secure bail after he landed in the net of DGGI officials.

High Drama in Mumbai Court

According to sources, Sunil Gutte hired legal bigwigs to secure his bail and fought pitched legal battles against the department in two Mumbai courts.

Gutte filed his first bail application at ACCM Court but surprisingly withdrew the application without pleading his case despite the fact that the counsels of DGGI Mumbai had already filed their counter.

Gutte’s counsels then went to the Sessions Court in Mumbai to secure bail for him and were able to get a hearing on Sunday (November 22) which saw a bitter legal battle in the courtroom between the two sides.

In the week-long legal battle, DGGI Mumbai zone was represented by Dhiraj Mirajkar and government’s standing counsel RK Pathak. The duo faced tough legal battle and high drama in the Sessions Court but eventually foiled the attempt by Gutte’s legal team to secure his release on bail.

According to the sources, the Sessions Court had to reprimand Gutte’s legal representatives and ask them to maintain the decorum in the court as they charged on the department’s legal team.

The ACMM Court at Mumbai Esplanade has extended Sunil Gutte's remand till December 8.

Issuing fake GST bills without supply of goods

Talking about Sunil Gutte’s modus operandi, officials said Sunil Hi-tech Engineers Ltd was engaged in availing and utilizing ITC based on bogus invoices, which were issued without any supply and delivery of goods and services.

Sources said the company availed fraudulent ITC to the tune of Rs 304 crores from multiple entities, and passed on the fraudulent ITC to the tune of Rs 216 crore to several entities on the basis of bogus invoices.

In addition to DGGI Mumbai zone, the company is also under investigation of several other zonal units of the DGGI.

“The main objective appears to be to artificially inflate the turnover and obtain enhanced credit limit and loans from the banks,” a source told ETV Bharat.