TFP Bureau, Raipur, September 19, 2025: In a major crackdown on tax fraud, the Chhattisgarh State GST Department has unearthed a massive racket involving the creation of bogus firms and fake billing networks, leading to tax evasion worth crores of rupees. The mastermind behind the syndicate has been identified as Mohammad Farhan Sorathia, a GST tax consultant who allegedly engineered the fraudulent operations with the help of his associates.
According to officials, the operation was exposed with the aid of the GST Analytics and Intelligence Network (GAIN)and the GST Prime Portal, which flagged suspicious activities linked to multiple firms. Acting on the alerts, the State GST Bureau of Investigation (BIU) launched a month-long probe, culminating in a raid on September 12 at Sorathia’s office.
Bogus Firms and Massive Tax Loss
Investigators discovered that Sorathia had floated 172 shell firms on paper, using them to generate fake invoices and claim fraudulent input tax credits. He had recruited at least five office staff to register these firms, file GST returns, and prepare e-way bills. Evidence also showed that his office manufactured bogus documents—including lease agreements, consent letters, and affidavits—to obtain fraudulent GST registrations.
A deeper analysis revealed that 26 of these bogus firms alone had generated e-way bills worth ₹822 crore, whereas the actual turnover reported in returns stood at just ₹106 crore. Officials estimate a direct loss of ₹100 crore in GST revenueto the state exchequer from these firms, with the overall tax evasion running much higher.
Operations Beyond Chhattisgarh
The documents seized revealed that the bogus network was not limited to Chhattisgarh. Registrations were traced to Punjab, Assam, Manipur, and Odisha, indicating the syndicate’s wide geographical reach. The firms were primarily used to generate fake supply bills and circulate fraudulent e-way bills to facilitate tax credit fraud.
Cash and Gold Seizure
On September 17, acting on intelligence that Sorathia was concealing crucial documents, the department carried out a search at the residence of his uncle, Mohammad Abdul Latif Sorathia. During the raid, officials seized ₹1.64 crore in cash along with 400 grams of gold in the form of biscuits. The Income Tax Department was immediately informed of the recovery, and parallel inquiries have been initiated into the source of the funds.
Wider Network Under Scanner
Preliminary investigations suggest that several brokers, scrap dealers, and companies that benefitted from fraudulent input tax credits are also part of the nexus. Authorities believe that these entities knowingly used bogus invoices to evade taxes and inflate their input claims. All such firms and individuals are now under close scrutiny, with the possibility of prosecutions and heavy penalties.
Ongoing Investigation
The State GST Department is in the process of calculating the total scale of the fraud, which is expected to run into several hundred crores. Legal proceedings have been initiated, and officials have confirmed that more arrests and seizures may follow as the probe widens.
A senior official of the department stated, “This is one of the largest GST frauds detected in recent years. The use of bogus firms across states to generate fraudulent bills reflects a highly organized network. The department is committed to ensuring that every rupee of tax revenue due to the state is recovered.”
The investigation continues, with authorities working in coordination with the Income Tax Department and other enforcement agencies to trace the money trail and hold all those involved accountable.
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