Kanpur Raid: DGGI Officers Raid Pan Masala Company Seized Cash worth of Rs.150 Crore amid UP Elections

On 22.12.2021, officers from the Directorate General of GST Intelligence (DGGI), Ahmedabad, with the assistance of officers from the local Central GST, began search operations in Kanpur based on particular intelligence. The search activities included M/s Trimurti Fragrance Pvt Ltd, Kanpur, which manufactures Shikhar brand Pan Masala and Tobacco products, as well as M/s Ganpati Road Carriers, Transport Nagar, Kanpur, which is involved in goods transportation.

The evidence suggested that the manufacturer was supplying goods without paying the necessary tax. To avoid generating E-way Bills while transporting the items, the transporter allegedly used to produce several invoices in the name of non-existent organisations, all under Rs 50,000/- for one full truck load. After deducting his commission, the carrier would collect the cash earnings of such illegal supply and send it over to the manufacturer.

The officers were initially successful in intercepting and seizing four such trucks outside the factory, which had been cleared from the business without invoices or E-way Bills, confirming the intelligence.

During physical stock taking at the factory, a deficit of raw materials and finished products was discovered, as the finished products had been secretly cleared. The company’s authorised signatory has admitted to clearing the items without paying GST.

More than 200 false invoices used in the past for transportation of products without payment of GST were discovered on the premises of the carrier, M/s Ganpati Road Carriers. The transporter further stated that goods were conveyed without e-way bills under the guise of bogus invoices, and that the sale revenues were collected in cash and given to the producer. The transporter’s possessions were seized for a total of Rs 1.01 crores in cash.

The home premises of partners of M/s Odochem Industries, Kannauj, UP, located at 143, Anandpuri, Kanpur, who were supplying fragrance compound to the said company, largely in cash, were also searched based on intelligence inputs. It was thought that the cash profits from the sale were hidden somewhere on the grounds.

A large sum of cash, wrapped in paper, was discovered during the search of the residential premises. The counting of cash has begun with the assistance of personnel from the State Bank of India, Kanpur, and is expected to last until the evening of December 24, 2021. The total cash sum is likely to be more than Rs 150 crores.

In the meanwhile, the agency intends to confiscate the cash under the terms of Section 67 of the CGST Act.

So far, a total of Rs 3.09 crores has been recovered in tax debts. The necessary follow-up action in the ongoing sensitive nature investigation is being planned.