Goods and Services Tax (GST) authorities have marked their biggest cash recovery so far with Rs 150 crore seized from multiple locations in Kanpur allegedly linked to Piyush Jain, a businessman who deals in pan masala and perfumes, officials said.
With UP polls looming, the seizure has triggered a political blame game with the ruling BJP and Opposition SP accusing each other of having dubious links with Jain.
According to an official statement, the Directorate General of GST Intelligence in Ahmedabad received a tipoff based on which the search was conducted on Wednesday. Officials searched the factory premises of Trimurti Fragrance Pvt Ltd, which manufactures Shikhar Pan Masala and tobacco products, and the office and godowns of Ganpati Road Carriers, in Kanpur, the statement said.
The residential premises of partners of Odochem Industries in Kannauj, which supplies perfumery compounds, were also searched. “...huge amount of cash, wrapped in paper, has been found. The process of counting of cash has been initiated with the help of officials of State Bank of India, Kanpur... The total amount of cash is expected to be in excess of Rs 150 crore,” the statement said.
“This is the biggest recovery ever in the history of CBIC,” Central Board of Indirect Taxes and Customs (CBIC) chairman Vivek Johri told a news agency, adding that no arrest has taken place so far.
“A case of fake invoicing and fake credit was reported...DGGI Ahmedabad team started searches on the manufacturer of pan masala and their supplier. A transporter and a fragrance company of Unnao were also searched as they were providers of fragrance to the pan masala company,” he said.
According to the official statement, the transporter allegedly generated multiple invoices in the name of non-existent firms, all below Rs 50,000 for one truck load, to avoid generation of e-way bills while moving the goods.
The transporter also allegedly collected the sale proceeds of such “clandestine supply in cash” and handed it over to the manufacturer after deducting commission, it said.
The officers initially intercepted and seized four such trucks outside the factory premises, cleared without invoices and e-way Bills, the statement said.
“In the factory premises, during physical stock taking, shortage of raw materials and finished products was noticed as the finished products had been cleared clandestinely. The authorised signatory of the company has admitted to have cleared the goods without GST,” it said.
More than 200 fake invoices used in the past for transportation of goods without payment of GST were recovered from the premises of Ganpati Road Carriers, it said, adding that Rs 1.01 crore in cash was seized.
Following the seizure of cash from Jain, who hails from the SP bastion of Kannauj, UP BJP spokesperson Rakesh Tripathi accused the Opposition party of getting a “helping hand from corrupt people and goons”.
“Several people close to the SP are being raided by the I-T and ED, in which hundreds of crores of cash is being found. They had accumulated unaccounted wealth through corruption. Now that elections are coming, they are opening their lockers,” Tripathi said.
Hitting back, SP national spokesperson Rajendra Choudhary said Jain had nothing to do with the SP. “He is not in our party, and I don’t know him,” he said. Another national spokesperson and former minister Anurag Bhadouria tweeted: “The Kanpur businessman is part of the BJP’s share... The SP has nothing to do with this friend of the BJP or his perfume,” he tweeted.
BJP national spokesperson Sambit Patra tweeted purported pictures of the raids on Jain's premises. “The Samajwadis have a slogan that the people’s money is theirs. Piyush Jain was the one who launched the Samajwadi ‘itra’ (perfume) and is being raided by GST team, where more than Rs 100 crore was found. Which Samajwad’s black money is this?” he tweeted.
On November 9, SP Akhilesh Yadav had released a "Samajwadi perfume" at a press conference at the party headquarters in Lucknow. He had said that the perfume “will carry the Samajwadi fragrance”.
The perfume was made by the team of party MLC from Kannauj, Pushpraj Jain. On Friday, Pushpraj Jain said: “I have nothing to do with Piyush Jain. I had launched the SP perfume on my own. The only thing is that Piyush Jain is from the same community as me. If a raid has been done against him, he will deal with it himself. He had not made any contribution to the perfume, which was launched by me in November.”
(With inputs from agencies)