'Benami firms, bogus ITC, fake bills': What we know about Mahesh Langa case till now

Mahesh Langa, an Ahmedabad-based journalist with The Hindu who has been arrested in a multi-crore Goods and Service Tax (GST) scam, is not named in the FIR filed in the case against him.

The Hindu has said the arrest is not linked to any report published in the newspaper.

While not too many details about the GST case are currently available in the public forum, here is what we know till now.

Bogus firms accusation

Langa has been accused of floating bogus firms in the name of his father and wife to avail input tax credit (ITC) benefits, according to Gujarat police. Along with three other accused in the case, he was remanded into police custody by a Gujarat court on Wednesday (October 9).

Also Read: Gujarat: Journalist Mahesh Langa arrested in GST 'scam'

The four accused were arrested by the Ahmedabad Crime Branch on Tuesday (October 8) based on a complaint filed by the Directorate General of GST Intelligence (DGGI). A day later, Langa’s uncle, a former IAS officer, was arrested from his residence in Gandhinagar taking the total arrest count to five.

The arrests are part of the DGGI’s probe into a multi-crore ITC fraud by a Gujarat-based racket concerning 13 firms and their proprietors. ITC is a tax availed by businesses to offset the GST paid on inputs like raw materials against the GST liability on the final product or service.

Raids carried out

The Economic Offences Wing and the Special Operations Group of the CID-Crime Branch, Ahmedabad carried out raids at 14 premises across five districts in the state – Ahmedabad, Junagadh, Surat, Kheda and Bhavnagar.

Later, an FIR was filed including the charge of floating bogus firms with an intent to defraud the government by availing bogus input tax credit through fraudulent transactions.

Also Read: ₹13-cr GST fraud busted after multi-city raids by UP STF, sales tax dept

“Initial findings suggest a large-scale conspiracy aimed at defrauding the government of significant revenue, potentially amounting to crores of rupees through fake billing, fraudulent documentation, and misrepresentation,” the crime branch stated in a press release.

Charges against Langa

“After prima facie investigation, it was found that more than 220 benami (fake) firms were set up on the basis of forged documents that were used in a racket where the accused availed and passed bogus ITC through fake bills,” Deputy Commissioner of Police (Crime) Ajit Rajian told The Federal.

Also Read: Bengal: Amit Mitra urges Sitharaman to call council meet on GST fraud

“The journalist Mahesh Langa was arrested after being questioned for several hours. The Central GST department has found some suspicious transactions in bogus firms floated in the name of Langa’s wife and father using forged documents. We have recovered ₹20 lakh unaccounted cash, significant amount of gold and several land documents from his residence in Ahmedabad,” he added.

Langa not named in FIR

While Langa is not named in the FIR, his father is named in it as an accused in suspicious financial transactions connected to multiple fake firms.

Apart from that, his cousin Manoj Kumar Langa is also named as one of the proprietors of DA enterprise, an Ahmedabad-based firm in which Langa’s wife is named as a partner.

“After questioning it was found that neither Langa’s wife nor his cousin knew about the existence of the firm or the fact that their names were being used in such a firm. When the police questioned Langa after that, it was found that he was the one who was handling the operations of the entire firm. So far, Langa’s wife and cousin have not been arrested,” Rajian told The Federal.

Also Read: Tax officer among 7 arrested in Rs 54-crore GST scam

“Although Langa’s name is not there in the FIR, it does not mean he is not an accused. His role in one of the companies came out during the investigation and that is why he was arrested and sent to 10 days custody by court order for further investigation,” he added.

Nambath's statement

In a series of tweets, Suresh Nambath, the Editor of The Hindu, said the case GST appears to have nothing to do with any report written by Langa for the newspaper.

"One of our journalists, Mahesh Langa, has been arrested by the Crime Branch of the Ahmedabad City Police on a complaint registered by the Central GST," he posted on the X platform. "While we have no details about the merits of the case, we are given to understand that this is not related to his reports published in The Hindu."

"We would like to state at this time that we appreciate his professional work for The Hindu as the Gujarat correspondent based in Ahmedabad," Nambath further tweeted. "We do hope that no journalist anywhere is targeted for their work, and we expect the investigation to be conducted fairly and quickly."

Who are the other accused?

The Crime Branch of Gujarat police has also arrested three other accused named in the FIR – Aijaz, a resident of Bhavnagar and a partner in a company that sells electric panel boards named in the FIR; Abdulkader, another Bhavnagar resident involved in selling sugarcane juice, ready-made clothes, and mattresses, and Jyotish Magan Gondaliya, a Surat-based businessman.

“The fraud was committed between February 1 and May 1, 2023 through a firm called Dhruvi Enterprise, which created six other firms from a single PAN number. The aim was to avail ITC by showing transactions that were never actually done. Other firms implicated in the fraud include Om Construction, Raj Infra, Haresh Construction Company, and DA Enterprise. The involvement of these firms is crucial as they are believed to have facilitated the fraudulent activities through bogus billing and manipulation of financial documents,” reads the FIR.

Also Read: DGGI detects ₹2.01 lakh crore GST evasion in FY24, with online gaming and BFSI most prone

The other accused who are named in the FIR but are yet to be arrested in the case, are Ajay Bhagwan Barad, son of Bhagwan Barad, the BJP MLA from Talala (Junagadh district) and his nephews Vijaykumar Kalabhai Barad and Ramesh Kalabhai Barad. As per the FIR, the trio are listed as proprietors of a Veraval-based firm Aryan Associates that is involved in the scam.