GST intelligence officers arrest SOM distilleries CEO in over Rs 30 crore tax evasion case

CEO of SOM distilleries was arrested by GST officers in connection with alleged tax evasion of over Rs 30 crore in the supply and sale of alcohol-based hand sanitisers by the firm. The Directorate General of GST Intelligence (DGGI) officials had already arrested liquor baron and promoters of the firm -- Jagdish Arora, his brother Ajay Arora, besides Binay Kumar, who was employed as the director of the company.

Bhopal:GST intelligence officers have arrested the CEO of SOM distilleries in connection with alleged tax evasion of over Rs 30 crore in the supply and sale of alcohol-based hand sanitisers by the firm during the past three months of coronavirus-induced lockdown period, officials said on Monday.

"The CEO, G D Arora, who was arrested on Sunday has been sent to judicial custody till July 24 by a local court," they said.

"The Directorate General of GST Intelligence (DGGI) officials had already arrested liquor baron and promoters of the firm -- Jagdish Arora, his brother Ajay Arora, besides Binay Kumar, who was employed as the director of the company," they said.

The firm has paid Rs 8 crore in cash towards its GST liability, the officials said, adding that the agency has seized alcohol-based hand sanitisers worth over Rs 20 crore produced by the firm.

Calls and e-mails to the company did not elicit any response.

Giving details of the case, the probe agency said the managers and other employees of SOM Distilleries Private Limited (SDPL), situated at Raisen near here, were examined.

"Their examination has indicated that during the three-month period from March 24, 2020, till June 25, 2020, the unit had manufactured about 56 lakh litres of alcohol-based hand sanitisers," a statement issued by the DGGI on Monday said.

"After accounting for the declared sale as per invoices the sanitizers found on stock, it is estimated that about 49 lakh litres of hand sanitizers with an estimated value of Rs 187 crore and involving a GST amount of Rs 33.53 crore was removed clandestinely and/or without payment of taxes by M/s SDPL," it said.

"Based on these investigations and his direct role in the clandestine removal of hand sanitizers, the CEO of M/s SDPL was arrested on July 12, 2020," the statement said.

"Earlier the CEO's statement was recorded on 26.6.2020 after which he had got admitted in a Bhopal-based hospital. On 9.7.2020, the owner of this hospital was summoned under Section 70 to confirm the medical status of the accused. Subsequently, the CEO was discharged by the hospital on 11.7.2020 after certifying that he was fit," it said.

"After his evidence was recorded on Saturday and Sunday, he was arrested by the DGGI officials," the statement said.

"M/s SDPL has voluntarily paid GST amounting to Rs 8 crore in cash on 09.7.2020. The total estimated GST evasion on hand sanitizers is estimated to be Rs 33.53 crore," it said.

"In its investigation and follow-up searches conducted at Bhopal, New Delhi and Gurugram during the first and second weeks of this month, hand sanitizers supplied by M/s SDPL in bulk drums were recovered from the recipients," the statement said.

"This confirmed the DGGI's assessment that besides clandestinely supplying Genius brand of alcohol-based hand sanitizers in the plastic bottles of sizes 90 ml, 180 ml, 500ml and 750 ml, M/s SDPL had also clandestinely supplied these sanitizers (in bulk) in packages ranging from 5 litres to 250 litres (drums) and even 30,000-litre tankers to various parts of the country," it said.

"At the receiving end, the recipients had then repacked these bulk consignments into retail sized bottles, affixed brand names and sold in wholesale retail to the public," the statement said.

"In view of COVID-19 induced lockdown and even subsequently, this product has a huge demand across India," the DGGI said.

PTI