Massive Tax Refund Fraud Uncovered by Enforcement Directorate

The Enforcement Directorate (ED) has unearthed a major tax refund fraud, involving the illicit acquisition of funds amounting to ₹263 crore. Central to this elaborate scheme was T Adhikari, a tax official, who is accused of manipulating the system to generate 12 fraudulent Tax Deducted at Source (TDS) refunds between November 15, 2019, and November 4, 2020. The ED's investigation has brought to light a complex network of financial misconduct and misuse of official privileges.

Illegal Funds Channeled

A Hindustan Times report mentioned that investigators discovered a significant portion of the embezzled funds, approximately ₹55.50 crore, diverted into Dubai-based businesses specializing in rock boulders and sand aggregates. This diversion was meticulously executed through hawala channels, following the initial routing of the funds through about 30-35 shell companies. This discovery was a key element in the ED's chargesheet filed against several individuals, including Adhikari and two businessmen, in the previous year.

The Front for Fraudulent Transactions

The probe further revealed the involvement of SB Enterprises, owned by Bhushan Patil, a co-accused businessman. The company is accused of fraudulently obtaining TDS refunds totaling ₹263.95 crore, far exceeding the legitimate claims of around ₹16 lakh over two fiscal years. The ED alleges that Adhikari was instrumental in this operation, controlling and operating Patil's bank account to facilitate the transfer of funds from SB Enterprises to Patil’s personal account.

Seizure of Assets and Ongoing Investigations

As part of their crackdown, the ED has provisionally seized, frozen, or attached assets worth ₹166 crore. These assets include properties in Lonavala, Khandala, Karjat, Pune, and Udupi (Karnataka), along with flats in Panvel and Mumbai. Additionally, luxury vehicles such as BMW X7, Mercedes GLS400d, and Audi Q7, presumably owned by the accused, have been impounded. This action represents a significant stride in the ED's efforts to recover a substantial part of the fraudulently obtained ₹263.95 crore. The investigation, which was initiated based on a case filed by the CBI following a complaint from the CBDT’s Additional Director General (Vigilance)-4, continues as the ED seeks to unravel further layers of this complex financial fraud.