Blind businessman dupes sales tax department of over Rs 10cr

NAGPUR: A blind man with a doctorate in political science figures in the list of top sales tax defaulters. Govind Agrawal also faces action for pulling the wool over the government's eyes by fraudulently pocketing crores collected in the name of Value Added Tax (VAT) - an indirect levy passed each time goods are sold.

The department on Friday issued notices to put his bungalow at Zingabai Takli and a factory at Saoner in his son's name under the hammer to recover the dues. His kin, on the other hand, term it as highhandedness and vindictive attitude of sales tax department officers, which they claim has left the family traumatized.

The family's overall dues run to over Rs10 crore, but the department hopes to net only around Rs7 crore through the auction. No other assets have been found so far.

Agrawal mainly deals in coal and steel, through KD Translinks and Mahamaya Steel respectively. But sources say transactions for a whole gamut of commodities were found through a maze of firms.

Investigations have revealed that Agrawal set up a series of dummy companies to route dubious transactions. His modus operandi was to sell goods in the name of dummy firms, for which a sales tax registration was also obtained. The VAT component was collected from purchasers, but the money was never deposited with the government exchequer. His purchasers, on the other hand, went on claiming credit for the VAT paid to him as they further sold the goods. VAT rules allow a set-off of tax liability in this manner.

In one such case Agrawal had registered a firm at Gondia, by submitting a residence proof from Pune, which included a ration card. However, one mistake by this smooth player helped corner him, said the source. One has to submit postdated cheques to get a VAT registration. Agrawal, who has registered numerous companies for VAT, made the mistake of submitting cheques from the same branch of Punjab National Bank ( PNB) at Bharat nagar, which links back to him.

The case was busted last year, when he was arrested from Ballarpur. Agrawal has remained in magisterial custody for 100 days, said the source on condition of anonymity. "His appearance may arouse sympathy, but he is indeed a confident man and visual imparity does not stop him from challenging the department," the source said.

Agrawal could not be contacted at his home. His son Deepesh called it a high-handed move by the sales tax department. "We did not receive any of the prior notices, and the taxmen hastily attached our properties. There was a long pause, after which the entire action was suddenly revived, this reflects a vindictive attitude by the officer handling this case," he said.

Action against Ravi Steel too

The sales tax department has attached the property of a defaulter involved in yet another sensitive case. A couple of properties of M/s Ravi Steel in Kamptee and Nagpur were attached on Friday to recover dues to the tune of Rs12 crore. Investigations reveal that the partners Santosh and Tushar Sahu not only withheld the amount collected as VAT from their buyers, but they also booked fake purchases to claim input credit on the tax paid. They too have reportedly floated several dummy firms for such deals. They have also been charged with suppressing sales figures to bring down their tax liability. A plea for anticipatory bail by the duo has been quashed

md. abdul wahab
class- pgdm 1st