A group which is active across the state has been passing on credentials of unsuspecting low-income group individuals, mostly from remote corners, to individuals who would allegedly use the data in setting up shell companies to evade tax, including goods and services tax (GST), senior officials of the revenue department under the finance ministry said.
Last Friday, a labourer from Domjur in Howrah filed a police complaint alleging that fraudsters used his documents to set up a shell company and evade ₹7 crore in GST.
The shocking discovery came when a six-member revenue department team from the ministry of finance arrived at Kartick Ruidas’s house for a search and seizure operation, believing he owned a company called KD Enterprise that had allegedly evaded crores in GST payments.
The Telegraph reported on Tuesday about Ruidas’s plight.
Ruidas, who works as a labourer at a factory manufacturing laboratory products in Howrah, told the investigators that he earns around ₹10,000 a month and is not the owner of any company.
“There have been several cases where the individuals have remained completely unaware that their PAN card, Aadhaar, or electricity bills have been used to set up shell companies until our teams reached their houses as a part of an investigation for alleged tax evasion,” a senior official of the finance ministry said.
“These individuals usually hand over the documents to agents either for a job, a bank loan or some other purpose. The loans or jobs never reach them, but the documents get used in setting up shell companies,” said the official.
Sources in the finance ministry said two years back, the probe team had arrested one of the kingpins of such a racket after tracking him down through a maze of sub-agents and agents who went around parts of rural Howrah and Hooghly collecting copies of PAN cards, Aadhaar cards and electricity bills from individuals to set up shell companies.
“After working for months, we could reach the kingpin, Tirupati Venkat Rao, from Howrah and arrest him,” said the official.
Rao had a case of tax evasion of around ₹600 crores and had set up 140 shell companies using such documents,” the official said.
“The 140-odd victims were mostly needy individuals who were promised a monthly dole of ₹3000, and their documents were collected. They even received the dole for the first few months before it was stopped,” said the official.
Sources said last year, the kingpin of a similar racket, Ravi Singh, from Rishra in Hooghly, was arrested. Singh had allegedly opened more than 60 shell companies using such documents, collected from needy individuals who sought bank loans through agents.
“There is another set of agents who target struggling small-time businessmen and ask them to share their GST numbers. A number is then used to show high turnover through a maze of shell companies, which entitles the businessman to get a loan from banks,” said another senior official who was a part of the team visiting Ruidas’s house in Howrah on Friday.
According to Ruidas, he had handed over his credentials to a contractor for setting up water pipelines last year.
“I don’t know. Maybe that set of documents was used to set up the so-called company, KD Enterprise,” Ruidas told The Telegraph.
Senior officers of Howrah City Police said they would speak to Ruidas and collect his statement while investigating how his documents reached someone who allegedly opened a shell company last June.
Such incidents raise questions about verification processes and the need for stronger safeguards to protect citizens from such sophisticated fraud schemes.