Second case of GST fraud against journalist Mahesh Langa; sent to four days police custody

Ahmedabad: A metropolitan court in Rajkot on Saturday granted four days police custody of journalist Mahesh Langa in connection with an FIR alleging GST Input Tax Credit (ITC) fraud. This is the fourth case registered against Langa in the span of a little over two months. He is also being investigated by the Enforcement Directorate for alleged money laundering charges.

In the latest case, the Economic Offences Wing (EOW) of Rajkot city's Detection of Crime Branch arrested Langa from the Sabarmati Central Jail, where he has been lodged since his arrest on October 8. The EOW produced him before the metropolitan magistrate in Rajkot and sought 14 days remand.

Seeking remand, the EOW told the court that custodial interrogation of Langa was needed for "in-depth" investigation into his role in the offence. The remand application claims that a financial transaction to the tune of Rs 55.77 lakh took place between DA Enterprises, a firm allegedly supervised by Langa, and Rajkot-based Parmar Enterprises, the alleged shell company which is alleged to have orchestrated the scam.

The remand application mentions that Langa was not giving "satisfactory answers" about the extent of financial benefits he received from the co-accused. Langa, according to police, has been claiming that he didn't know anything as affairs of the firm in question were being handled by Manoj Langa and Nilesh Langa (both related to him). Following the arguments, the metropolitan court granted four-day custody.

The FIR was registered by the Rajkot DCB on November 27 against 14 individuals and firms including DA Enterprises. The Rajkot case against Langa has similarities with the first FIR registered by the Ahmedabad DCB, which led to his arrest on October 8. Like in the Ahmedabad case, this FIR, too is based on a written complaint moved by a GST official to the police.

The complainant, Jay Prakash Singh, Superintendent of Central GST, Rajkot, has stated that during "analysis/mining of data" it was found that Rajkot-based Parmar Enterprises obtained GST registration on "forged" documents and a rent agreement dated January 20, 2023.

The GST registration of the firm was cancelled suo moto from June 24. The data suggested that the firm was involved in "receipt and transfer of bogus Input Tax Credit of GST to unscrupulous recipients by issuance of fake invoices without the supply of underlying goods."

The FIR states that J M Kaila, police inspector, EOW, requested the department on November 11 to provide information related to e-way bills (needed for movement of goods under GST) generated by Parmar Enterprises. On November 22, a sub-inspector, EOW, informed the Deputy Commissioner, CGST Division, Rajkot that documents obtained by Parmar Enterprises were forged and the company didn't exist at its address.

"...it appears that Parmar Enterprises has generated 50 fake e-way bills and passed on fake ITC fraudulently to various recipients...from June 2023 to September, 2023 without actual supply of corresponding goods," Singh stated in his complaint with part of the FIR.

The FIR alleges that Parmar Enterprises availed ineligible ITC to the tune of Rs 61 lakh after generating bogus bills of nearly Rs 3.50 crore. It is alleged that the firm passed on the ITC to the co-accused firms and individuals, including DA Enterprises. The FIR also states that DA Enterprises bought four fake bills worth Rs 47 lakh from Parmar Enterprises.

"...it appears that the misdeeds of firms/persons involved in this scam attract penal provisions under the Bharatiya Nyay Sanhita, 2023 apart from the CGST Act, 2017," Singh has said in this complaint.

On October 7, Langa was booked by the Ahmedabad DCB on identical charges and was arrested a day later. He has been behind bars ever since. The second case was lodged by the Gandhinagar police for possession of sensitive government documents, and the third case was lodged by the Ahmedabad DCB for cheating worth Rs 28 lakh.

In the cheating case, a court recently granted Langa anticipatory bail, while his application for regular bail in the first case is pending in the High Court. Langa is also facing arrest in the money laundering case lodged by the Enforcement Directorate based on the FIR filed by the Ahmedabad DCB of GST fraud.