The Delhi High Court has refused to interrupt in Show Cause Notice (SCN) proceedings against accused of availing fraudulent IGST refund by creating fake firms.
The bench of Justice Yashwant Varma and Justice Harish Vaidyanathan Shankar has observed that there is no firm or business establishment owned by the accused, only fake firms created with the help of Shri Mukesh Kumar, Shri Bharat Ahuja CA, Shri Sanjeev Maggu and Shri Akhil Krishan Maggu on his directions are being operated by him in order to avail fraudulent IGST refund on the strength of fake invoices. There are four employees in his office located at Ramphal Chowk and they are looking after the office work; that the names of those employees are Ms. Gurmeet Kaur, Shri Uday Raj, Shri Shankey Saini and Shri Mukesh Kumar. The salary is paid to all in cash only. Sanjeev Maggu and Akhil Krishan Maggu are his partners in the whole process of fake firms created for the purpose of availing fraudulent IGST refund.
The petitioner has challenged the the Circulars dated 05 July 2017 and 09 February 2018 designating “proper officers” for the purposes of discharge of functions under the Central Goods and Services Tax Act, 2017 is concerned, although the Circulars themselves are challenged, the petitioner contends that the Show Cause Notice proceedings are being adjudicated by an authority who has not been designated as the proper officer. Although the SCN was issued by the one official, the SCN proceedings are being adjudicated by another official.
The department stated that on instructions that it is the authority as designated in terms of Sl. No. 3 of the Circular dated 05 July 2017 and posted in the West Directorate who is adjudicating the SCN proceedings. Consequently, it was found no merit in the challenge which stands raised to the Circulars.
On being shown a list of 14 firms. Overseas, M/s Cameo Overseas, M/s Ambay Trading Inc. and M/s Swadeshi Enterprises firms are involved in the export of different items and claiming refund of IGST; that he is controlling and operating all these firms through Shri Mukesh Kuihar, resident of Vikas Nagar, Uttam.Nagar; that Shri Bharat Ahuja, CA helped them in getting GST registration of all these firms on the basis of identity cards, and other documents arranged by Shri Mukesh Kumar in lieu of Rs. 10,000 per month for every person and Rs. 20,000 paid to Shri Mukesh for office expenses.
On being asked about the proprietors of the firms and how he came in touch with them, he stated that he did not recollect all the names but some of the names are Shri Deepak Kumar Mishra, Shri Praveen Tiwari, Shri Manoj Kumar and Shri Arun. Mukesh Kumar has arranged the KYC documents like Aadhar Card, PAN cards of some persons mostly residing in his vicinity, i.e., Vikas Nagar, Uttar Nagar. The documents are arranged by him on payment of Rs. 10,000 to Rs. 15,000 per month per person. Further Rs. 20,000 is paid to Shri Mukesh for the office expenses. On the basis of these documents, he has made rent agreements and opened proprietorship and partnership firms.
On being asked about the names and details of the suppliers of goods exported by the said firms, he stated that in some of the cases, no goods have been purchased by these firms. All the work related to the above firms is being looked after by Shri Mukesh Kumar and he can explain the things in detail. Whereas in others, purchases have been made without any invoices or on the invoices of fake firms.
In the case where purchases are shown from the fake firms, the goods are procured from the grey market in cash on being asked to submit details of the CHAs who did export related work of the above firms, he stated that Shri Samsheswar Sharma from M/s Abex Services Pvt. Ltd. and Shri Lalit Gupta from Harjeet Singh Johar, CHA used to come to him for export clearance.
On being asked to inform what happened to the refund amount after it gets credited into the accounts of the above said firms, he stated that as he has already explained above, Shri Mukesh Kumar was looking after day to day activities of the above stated firms as per his, Sh. Sanjeev Maggu and Sh. Akhil Krishan Maggu’s directions.
As soon as the amount of refund was credited into the accounts of any of the above said firms, he himself or sometimes his direction through Whatsapp Calling or Whatsapp Message transfers that refund amounts into the accounts of some other firms either through RTGS through Cheque.
At the time, he was not able to recollect names of the all those firms where the refund amount have been transferred but few which he on or was able to recollect are M/s Bhagwati Trading Co. and M/s Babaji Enterprises; that Shri Puneet, Shri Tarachand & Shri Ram Prakash are related to these firms. On his directions these persons withdraw the money in cash and handed over the same to the person on their directions or transfer the money to the account of the other firms.
On the basis of search authorization dated 16.08.2019 under Section 67(2) of the COST Act, 2017, the officers of this office search the office premises of Shri Ramesh Wadhera, located at E-513, Gupta Plaza, Near Ramphal Chowk, Sector 7, Dwarka, New Delhi. The officers, upon reaching the office premises, found it to be locked.
The officers contacted one Smt. Gurmeet Kaur at her mobile number, an employee working in the said premises. She informed that she is out of Delhi, however, she would send somebody to open the said premises. However, no one appeared at the premises to unlock the same. Further, Smt. Gurmeet Kaur was contacted many times, however, she could not be contacted. Therefore, search could not be conducted at the premises. Proceedings were recorded in panchnama.
The accused, Ramesh Wadhera submitted an unsigned letter before the Patiala House Court, retracting his statement, which was taken on record by Duty MM. Despite that, on, the court accepted DGGFs application for judicial remand of Sh Ramesh Wadhera for further 14 days. However, when he was granted bail, despite one of the bail condition to cooperate with the investigation, he never appeared in response to summons issued to him. It is pertinent to mention here that Shri Ramesh Wadhera had made changes in his aforementioned statement dated 15.08.2019 in his own handwriting.
Therefore, it is wrong on his part to contend that the statement was typed by the officers and he was coerced to sign the said statement. The statement was further corroborated by the evidences found in the mobile phone of Ramesh Wadhera, as detailed in the subsequent Therefore, the retraction of Shri Ramesh Wadhera was only an attempt to derail the investigation and mislead the Court for getting bail.
The court held that the seriousness of the allegations which stand levelled, we find no ground to interdict the SCN proceedings.
Case Details
Case Title: Ramesh Wadhera Versus DGGI
Case No.: W.P.(C) 1115/2025 & CM APPL. 5550/2025 (Stay)
Date: 29.01.2025
Counsel For Petitioner: Naveen Malhotra and Ritwik Malhotra
Counsel For Respondent: Aditya Singla
