GST fraud case: State officials in dock as police step in

Representation pic

A fornight after mid-day reported about the fraud within the state Goods and Services Tax (GST) office by two tax inspectors, the Mumbai Police has initiated an inquiry. GST officials, who initially attempted to sweep the fraud under the rug, approached the Mumbai police to request a criminal investigation into the financial misconduct.

In response to their complaint, the Economic Offence Wing (EOW) and the Byculla police have received applications. According to GST officials, the scale of the fraud exceeds Rs 150 crore.

mid-day reported about the alleged fraud committed by tax officers Ami Lalge and Gajanan Lad, amounting to over Rs 150 crore, on September 26, 2023. However, despite a report from GST's own vigilance wing, no further action was taken by GST authorities, apart from suspending the officers involved. Government regulations dictate that the GST department should have immediately reported the matter to the police, as it represents a significant loss of revenue in collusion with government employees.

The inquiry is yet to be assigned to a police officer. File pic

In the wake of mid-day's report, the Anti-Corruption Bureau of Maharashtra has decided to step in and request the inquiry report prepared by the vigilance wing. The ACB will examine whether the provisions of the Prevention of Corruption Act 1988 are applicable in this case. The Director-General of the ACB sanctioned the proposal to proceed with obtaining the report a couple of days ago.

In September, GST officials had written to the Mumbai Police regarding the fraud. Nitin Patil, special joint commissioner of GST, also met with Joint Commissioner Nishith Mishra in this regard and submitted the application for the probe. According to sources, the application was aimed at investigating the role of tax officer Amit Lalge in the fraud, in which traders were unjustly refunded through their shell companies.

"We had written to the EOW, and I personally met with an officer to initiate the investigation," said Nitin Patil, special joint commissioner of state GST. "We have also received acknowledgment from them about the inquiry and have requested the vigilance department's report and other related documents," he added.

Sources within the EOW revealed that the inquiry regarding the application has been assigned to Unit 12 of the wing, located on the ground floor of the GST Headquarters in Mazgaon. The wing has sent a letter to GST officials, requesting all relevant documents and summoning officials for statements, but none of them have responded, according to sources familiar with the inquiry. Officials within the GST office have also confirmed this development.

On the other hand, the GST office is investigating the fraud committed by tax inspector Gajanan Lad, who was suspended in June 2023. They have submitted an application to Zone 3 of the Mumbai Police. A GST official stated, "As the fraud amount in this case is around R1 crore, we have requested the local police to conduct the inquiry. Subsequently, the application has been forwarded to the local police."

DCP Akbar Pathan forwarded the letter to the Byculla police station a couple of days ago. A source at the police station confirmed receiving the application from the Zone office. The inquiry is yet to be assigned to a police officer.