Lucknow, Aug 25 (IANS) The Enforcement Directorate (ED) seized Rs 3.8 crore cash during searches at 11 premises in Uttar Pradesh and Haryana against a company which misused GST provisions and fabricated invoices to cause a loss of Rs 27.02 crore to the government, an official said on Tuesday.

The ED’s Lucknow Zonal Office, conducted the search operations on Monday at the 11 premises under the provisions of Prevention of Money Laundering Act (PMLA), 2002.

Unaccounted cash amounting to Rs 3.8 crore along with the incriminating documents/digital devices were also seized during searches, the ED said.

The fraud is connected with utilisation and passing of fake Input Tax Credit (ITC) without actual supply of goods/services by a company, the central agency added.

The ED initiated the investigation in the matter based on the FIR registered by the Uttar Pradesh Police under various sections of the Indian Penal Code, 1860, which are scheduled offences under the PMLA, 2002.

It is alleged by the predicate agency that the accused company and its directors fraudulently availed and passed on Input Tax Credit on the strength of fabricated invoices and forged e-way bills, without any actual supply or receipt of goods, thereby causing wrongful loss to the Central government exchequer to the tune of Rs 27.02 crore, the ED said in a statement.

The ED said that forged consignment shipment challans were prepared in a pre-planned manner by the said company with the intention of obtaining fake Input Tax Credit and thereby causing loss to the government.

Investigation has revealed that fake Input Tax Credit of about Rs 10.28 crore was availed and passed on by the said company during the Financial Year 2018-19 through a chain of non-existent and bogus entities, and that the funds received from the beneficiary firms were transferred to such entities on the very same day, layered through a maze of accounts and finally withdrawn in cash, the ED added.

During the search, documents recovered were analysed and statements of key persons, including beneficiaries, were recorded in which it was revealed that the network of fake ITC spreads to many other such units, the ED said.

–IANS

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