Authorities in Uttar Pradesh’s Gonda district have registered an FIR over an alleged GST irregularity involving around ₹2.22 crore in input tax credit (ITC). The case concerns a Kolkata-based firm that allegedly reported business transactions despite authorities finding no actual commercial activity at its declared premises.
The case came to light following a complaint from the State Tax Department. Police have registered the case at Kotwali Dehat police station against the proprietor of Sarveshri Bhagwant Enterprises, while further investigation is underway.
Firm Allegedly Had No Physical Business Activity
According to the State Tax Department, the firm was registered on the GST portal, but an inspection of its declared business location found no evidence of an operating business.
Local reporting states that the registration documents included an electricity bill and rent agreement that officials subsequently described as allegedly fabricated. During a verification conducted on August 26, authorities reportedly found that the firm did not exist at the stated location.
The department's findings raised concerns that the GST registration may have been used to record transactions without corresponding business activity.
Turnover Rose Sharply on GST Records
The firm's reported turnover increased significantly over the period under investigation.
According to the case details, the business showed approximately ₹45.55 lakh in outward supplies in October 2025. By July 2026, the reported turnover had risen to around ₹11.94 crore.
Local reports said officials found no corresponding evidence of genuine movement of goods for the transactions under scrutiny.
₹2.22 Crore ITC Under Investigation
The State Tax Department alleges that the firm was involved in transactions through which approximately ₹2.22 crore of input tax credit was claimed or passed on without genuine underlying trade.
Another local report provided a breakdown, stating that around ₹8.20 lakh in disputed credit was associated with the October 2025 transactions, while approximately ₹2.14 crore was linked to the July 2026 transactions.
The central issue is whether invoices and reported supplies represented genuine transactions. The allegations remain subject to investigation and legal proceedings.
GST Registration Suspended and FIR Filed
Following the departmental verification, the firm's GST registration was reportedly suspended on August 27, 2026.
The State Tax Department subsequently filed a complaint, following which police registered an FIR and began investigating the alleged GST irregularities.
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Conclusion
The Gonda case highlights the scrutiny faced by GST-registered businesses when reported transactions do not appear to match physical business activity. While authorities have alleged that Sarveshri Bhagwant Enterprises was used for paper transactions and disputed ITC claims, the allegations will be examined through the ongoing investigation and legal process.