Hyderabad CCS Files Major Tax Fraud Case

Hyderabad CCS Files Case in ₹1,000 Crore Tax Fraud Scandal

Hyderabad CCS Files Major Tax Fraud Case.In a significant development, the Central Crime Station (CCS) police in Hyderabad have booked a case against former Chief Secretary Somesh Kumar and two high-ranking officials from the Commercial Taxes Department. The implicated officials are Deputy Commissioner A. Siva Rama Prasad and Additional Commissioner (State Taxes) S.V. Kasi Visweswara Rao. This case is connected to a massive ₹1,000 crore Input Tax Credit (ITC) scam that has sent shockwaves through the state.

The complaint was lodged by K. Ravi Kanuri, Joint Commissioner (CT) of the Central Computer Wing in Nampally, alleging extensive GST fraud. The FIR also names ‘Plianto Technologies’ and Sobhan Babu, an assistant professor at the Indian Institute of Technology (IIT) Hyderabad, exposing a web of complicity and corruption. For the latest updates on this case, stay tuned to Samaya Jyothi.

Hyderabad Unfolding of the Scam

Hyderabad CCS Files Major Tax Fraud Case

Case Overview

In a significant development, the Central Crime Station (CCS) police in Hyderabad have filed a case against former Chief Secretary Somesh Kumar and two senior officials from the Commercial Taxes Department. The implicated officials are Deputy Commissioner A. Siva Rama Prasad and Additional Commissioner (State Taxes) S.V. Kasi Visweswara Rao. This case is connected to a staggering ₹1,000 crore Input Tax Credit (ITC) scam that has stunned the state.

Discovery of the Fraud

The case first emerged during an audit conducted by the Commercial Taxes Department. This audit identified discrepancies in tax returns filed by ‘Big Leap Technologies and Solutions Private Limited,’ a company that purportedly specializes in manpower supply. Consequently, the firm faces accusations of passing on ITC without making the required tax payments. This action resulted in a considerable loss to the state’s treasury.

Flaws in the Scrutiny Module

The audit also uncovered that discrepancies in tax returns went unnoticed due to flaws in the ‘Scrutiny Module’ software developed by IIT-H. This software, designed to analyze and report discrepancies in tax returns from various goods and service taxpayers in Telangana, failed to identify significant issues related to Integrated GST (IGST). Consequently, this oversight contributed to revenue losses for the state.

Procedural Lapses Exposed

Furthermore, the Commercial Taxes Department’s review of IIT-H exposed additional procedural lapses. The audit report noted that software changes were made based on oral instructions from senior officials, including then Chief Secretary Somesh Kumar and the implicated officers S.V. Kasi Visweswara Rao and A. Siva Rama Prasad. These issues were compounded by inadequate documentation and procedural inconsistencies.

Conclusion

Overall, this case highlights serious flaws in both the oversight mechanisms and the software used for tax scrutiny. For the latest updates on this unfolding case, stay tuned to Samaya Jyothi.

Hyderabad CCS Files Major Tax Fraud Case

The involvement of Plianto Technologies has also been a point of contention. The company, which had operations within IIT-H premises related to the Commercial Taxes Department, denied developing any software for the department. This denial has led to further investigations into the agreement between IIT-H and the Commercial Taxes Department. The audit revealed deficiencies such as vague specifications, lack of clear timelines, and ambiguous payment terms. IIT-H’s control over data also raised concerns about potential data manipulation favoring specific firms.

Thane Professor Sentenced to 3 Years for Harassing MBBS Trainees

Communications and Investigations

The investigation took a dramatic turn with the discovery of a WhatsApp group named ‘Special Initiatives,’ which included Somesh Kumar, Visweswara Rao, and Siva Rama Prasad among its members. The group was allegedly used for issuing instructions and discussing software changes. Despite claims that the group was inactive since December 2022, it was found to be active until February 2024. WhatsApp chat history indicated that reports estimating IGST losses were generated, and instructions were given not to cancel registrations even in cases of fraud.

Following these revelations, the police seized the mobile phones of the individuals involved to prevent potential data manipulation. The FIR also highlighted cases of tax evasion exceeding ₹1,000 crore, uncovered through fraudulent activities within the state.

Misuse of Technology and Unauthorized Changes

The investigation took a startling turn with the discovery of a WhatsApp group named ‘Special Initiatives,’ where instructions were reportedly exchanged between Somesh Kumar, Visweswara Rao, Siva Rama Prasad, and Sobhan Babu. The police found that this group was active until February 2024, despite claims that it had been inactive since December 2022.

The WhatsApp chat history revealed that reports estimating IGST losses were generated, and instructions were given not to cancel registrations even in cases of fraud. This raised concerns about data manipulation and potential cover-ups. Mobile phones of the individuals involved were seized to prevent further data tampering.

Forensic Audit Findings

A forensic audit conducted by the Centre for Development of Advanced Computing (C-DAC) uncovered severe data manipulation. The audit revealed that specific Taxpayer Identification Numbers (TIN/GSTIN) and officer employee IDs were hardcoded into the software, facilitating selective tax evasion. Unauthorized access to proprietary data of the Commercial Taxes Department was found, with data transferred to a third-party server in Hindupur, Andhra Pradesh.

Further investigation revealed unauthorized changes in taxpayer jurisdictions, allegedly benefiting certain individuals and firms. For instance, Duet India Hotels (Hyderabad) Private Limited was reportedly moved to a jurisdiction favorable to them, with advance rulings that benefited the taxpayer, all without the necessary approvals from the Commissioner of State Taxes.

Implications and Future Developments

The scale of this scam underscores the need for stringent checks and balances in the tax administration system. The involvement of high-ranking officials and a reputed institution like IIT-H points to deep-seated issues within the system. As the investigation continues, the CCS police are expected to uncover more details and hold the responsible parties accountable.

For the latest news and updates on this developing story, follow Samaya Jyothi, which provides comprehensive coverage of local crime cases and their implications.