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GST Officials Locked Inside Shops Owned by 3 Muslim Kozhikode Residents in Kerala

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GST Officials Locked Inside Shops Owned by 3 Muslim Kozhikode Residents in Kerala

The Goods and Services Tax (GST) Department raided 20 textile shops in Kozhikode of Kerala over charges of ₹ 27 crore tax evasion. Three residents K.S. Ashraf Ali, Ali’s wife Noor Jahan, and Shebir were owners of the shops. The GST officials noticed several irregularities in the dealings and trade of the shops. They surveyed the shops’ operations for two months and then raided the suspect homes and shops on Friday, 14th July 2023.

Why were the GST Officials locked in the Shop?

KS Ashraf Ali, Noor Jahan, and Shebir ran the 20 textile stores in collaboration with other members of the community. The raid was led by the Joint Commissioner of GST Intelligence of Kerala North Zone, T.A. Ashokan. Intelligence officer Shijoy James was also one of the leaders of the team. 50 GST officials were part of the raid.

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Reports say that the local Kozhikode shop owners locked six GST officials inside a shop on SM Street during the raid. They were stuck inside for 30 minutes and had to call for police assistance. The police had to intervene to ensure the vendors’ cooperation and release of the officials. The reports further state that the traders and GST officials got into severe arguments on this matter and the tax fraud.

GST raids Kozhikode

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Currently, the local Kozhikode Traders’ Union has dismissed these claims. The Union officials claim that the GST officers were not locked inside, only the shops were shut for namaz. Furthermore, they said the owners were not informed in advance of the upcoming raids. These ridiculous claims were debunked by first-person accounts in the media on the misbehavior of shop owners and the fraudulent tax receipts.  

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The Suspected Case of Tax Evasion

27 crore tax fraud found in kozhikode gst raid | മിഠായിത്തെരുവിലെ റെയ്ഡ്: കണ്ടെത്തിയത് 27 കോടിയുടെ നികുതിവെട്ടിപ്പ് | Mangalam

PC Mangalam

The operation of the establishments came to the attention of the State GST Intelligence wing for non-payment of state GST. The officials found that the establishment files a turnover of several crores. However, they pay no taxes to the state of Kerala. The owners claim that they pay GST in Gujarat and Rajasthan, from where they source their products. 

The owners showed receipts of goods bought from Gujarat and Rajasthan, but the goods listed in the receipts were never transported. Moreover, most of the details of the Gujarat wholesaler were fake. The owners made fake tax payment documents. Thereafter, they added tax to the price of the products while selling in Kozhikode. They also sold goods to each other to evade tax and boost their sales record. 

Conclusion

The fake receipts should be enough to put the owners behind bars. The case seems to be of money laundering and illegal import or sale of goods. However, no further legal actions were reported by the media on this case. Furthermore, the state of Kerala did not file charges for the misbehavior of the locals with officials while they were doing their duty. The sad fate of government officials in Kerala is plainly observable in this case of tax evasion. 

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