According to CCS police, Hyderabad’s Central Crime Station (CCS) filed a lawsuit against former Chief Secretary Somesh Kumar, Deputy Commissioner A. Siva Rama Prasad and Additional Commissioner (State Taxes) S.V. Kasi Visweswara Rao for a ₹1,000 crore Input Tax Credit scam.
The Joint Commissioner (CT) of the Central Computer Wing, Nampally, K. Ravi Kanuri filed a complaint on July 26 accusing of GST fraud. The First Information Report (FIR) also includes ‘Plianto Technologies’ and Sobhan Babu who is an assistant professor at Indian Institute of Technology (IIT)-Hyderabad.
The case came into limelight when commercial taxes department audited ‘Big Leap Technologies and Solutions Private Limited’ tax returns indicating inconsistencies in the calculations. Mr. Kanuri complained to CCS that the manpower supplying entity had allegedly misappropriated Input Tax Credit (ITC) without corresponding tax remittances, leading to a huge loss to State exchequer.
However, larger picture emerged when Commercial Taxes Department examined IIT-H, which was procured as a service provider for developing Software on analytics and discrepancy reports on GST returns filed by these taxpayers in Telangana.
“The audit has revealed discrepancies with Big Leap Technologies that were not identified by the “Scrutiny Module” developed by IIT -H,” she said. “Thus, this prompted the department to authorise an officer to visit the premises of IIT-H further investigation.” During the visit, several procedural lapses were noted including lack of documentation for software changes and reliance on oral instructions from senior officers such as A. Siva Rama Prasad, the then Chief Secretary Somesh Kumar,and S.V.Kasi Visweswara Rao,” said Mr. Brijendra Singh IPS.
At least noticeably enough, Scrutiny Module reports missed instances of Integrated GST (IGST), resulting in revenue losses. It was still queried if Plianto Technologies were involved because any transactions relating to Commercial Taxes Department were conducted using their name within IITH premises.
“However, Plianto Technologies denied any software development for the department raising additional questions. It then became necessary that there be an audit of agreement between Commercial Taxes Department and IITH only to find out deficiencies such as unclear specifications, lack of timelines and unclear payment terms among others.” Furthermore,” it was noted that IIT-Had control over data enabling possible manipulation of data favoring certain companies” Police added.
Instructions via WhatsApp Group
Further police investigation showed that Professor Sobhan Babu popularly known as the Project Investigator took instructions through a Special Initiatives WhatsApp group which had Somesh Kumar, Siva Rama Prasad and Visweswara Rao as members. Later that evening, commercial taxes department issued an executive memorandum to Siva Rama Prasad and Visweswara Rao directing them to explain the membership of the group and changes made to the software based on the instructions provided in the group. They responded by saying that this was a group ran under Somesh Kumar’s leadership but had been dormant since December 2022.
“However, it has been discovered that this group was still active until February 2024. The WhatsApp chat history also revealed generation of reports indicating IGST losses with instructions even in cases of fraud not to cancel registrations. Following these revelations, mobile phones of the individuals involved were seized to prevent potential data manipulation,”said DSP.
In its FIR, police alleged that Telangana State Beverages Corporation Limited was one such masked case.’’ Similarly, evasion of over ₹1,000 crore was unearthed through fraudulent cases detected in the state.”
Forensic audit
According to the FIR, the forensic audit carried out by Centre for Development of Advanced Computing (C-DAC) revealed serious malfeasance in data manipulation. For example, it was discovered that specific Taxpayer Identification Numbers (TIN/GSTIN) and officer employee IDs were hardcoded into the software which could facilitate selective tax evasion. Further, evidence was gathered on unauthorized access of proprietary data of Commercial Taxes Department which had been transferred to a third-party server with IP address in Hindupur Andhra Pradesh.
In addition, it was realized that there were unauthorized changes made in taxpayer jurisdictions with intentions to favor certain individuals as well as firms. “For instance, Duet India Hotels (Hyderabad) Private Limited was shifted to a jurisdiction reportedly favorable to them, with advance rulings issued that benefited the taxpayer. These changes were allegedly made without the necessary approvals from the Commissioner of State Taxes, as required by law,” said Police.
Also highlighted in a forensic report is that workers who are purporting to work under IIT-H for The Commercial Taxes Department were drawing salaries from Plianto Technologies. This finding contradicts what is stated in the contract terms and raises doubts about the validity of these costs and roles played by personnel involved.
The Commercial Taxes Department has initiated further investigations requesting a forensic audit of applications and database used by IIT-H. This should help identify any other inconsistencies or manipulations in data if any occurred. A preliminary report already points towards possible conspiracy between officials and concerned firm(s),” explained police.
On its part however, IIT-H claimed all their actions were done on directives from departmental officials and former Chief Secretary. They provided supporting documents for this claim including where draft notices omitted crucial components like Integrated GST (IGST).
