CID to Focus on Role of Top Officials in Commercial Tax Irregularities

Hyderabad: The Crime Investigation Department (CID) officials, who have registered cases concerning irregularities in the commercial tax department, are now likely to focus on WhatsApp groups that were monitored by the then chief secretary Somesh Kumar, who directed the activities of department;s officers.

Following the registration of these cases, CID officials have initiated an investigation based on the First Information Report (FIR) provided by the Hyderabad Central Crime Station (CCS), detailing the alleged irregularities. The CID is also preparing to serve notices to the accused and other suspects as part of the inquiry.

Project investigator Prof. Sobhan Babu received instructions through a WhatsApp group named "Special Initiatives," which included Somesh Kumar, additional commissioner S.V. Kasi Visweswara Rao and deputy commissioner A. Siva Rama Prasad.

The CID is also seeking an internal report from the commercial tax department. This report indicated that an urgent memo was issued to Visweswara Rao and Rama Prasad, directing them to explain the composition of the WhatsApp group and the changes made to the software-based on directions issued in the group.

Sources allege that irregularities amounting to at least Rs.1,400 crore occurred in the commercial tax department under the directives of senior officers at the time. The CID plans to retrieve WhatsApp data to gather leads for further investigation.

Meanwhile, several companies are also believed to have been involved in these irregularities.

For instance, Big Leap Technologies and Solutions Pvt Ltd, a company registered as a manpower supplier, is accused of passing on input tax credit worth `25.51 crore without paying tax. The commercial taxes department engaged IIT-Hyderabad as a service provider to develop software.

The service provider's role was to perform analytics and generate discrepancy reports based on the tax returns filed by registered taxpayers. Notably, a basic discrepancy detected during a desk audit of Big Leap Technologies and Solutions Pvt Ltd did not appear in the reports generated through the scrutiny module developed by IIT-Hyderabad.

It was discovered that the suspected companies provided IIT-Hyderabad with a format to capture all four types of discrepancies under IGST, CGST, SGST and cess. However, they were unaware why IGST and cess notices were not generated. Reports estimating IGST loss were generated, but instructions were issued not to cancel registrations even in fraud cases.