Unraveling a Major GST Evasion Scheme in Uttarakhand
The recent unearthing of a significant Goods and Services Tax (GST) evasion case in Uttarakhand has revealed a sprawling inter-state hawala network allegedly facilitating transactions exceeding ₹23.65 crore. The operation was dismantled by the Bareilly police, leading to the arrest of two individuals involved in the scheme, while the central figure of the gang, based in Shahjahanpur, remains at large. Investigators are delving into connections that span across Uttarakhand, Bareilly, Badaun, Shahjahanpur, and potentially even as far as Nepal.
GST Notice Sparks Investigation
The chain of events began when the GST department in Haldwani issued a notice amounting to ₹1,47,56,888 to a local named Shabbu, who resides in Kesar Pur village. The notice highlighted various suspicious financial activities, prompting authorities to freeze his bank accounts. Shabbu, primarily a zari artisan and daily-wage worker, was blindsided by the notice, as he had no prior experience with businesses of such magnitude. Concerned, he approached the local police station, unknowingly kickstarting an investigation that would reveal a broader criminal scheme.
The Role of ‘Mule Accounts’
During the investigation, it was discovered that a villager named Shahid had manipulated Shabbu, luring him into opening two bank accounts under the pretext of business expansion. Shahid retained all banking materials like passbooks and chequebooks, which is indicative of what law enforcement refers to as ‘mule accounts’. These accounts serve as a façade for illicit transactions. Notably, one of the accounts at HDFC Bank reported staggering transactions totaling ₹23.65 crore from 2022 to 2025, operated by Amit Gupta, a local resident of Kankartola.
Hawala Masquerading as Mentha Oil Trade
Amit Gupta cleverly constructed a hawala operation disguised as a legitimate mentha oil trading enterprise. To create a veneer of legitimacy, he registered around twelve fake companies under his name and those of his relatives. Among these entities were firms like Satya Sahab in Bhuta, Mahavir Traders in Dataganj, and Mahakal Traders in Tilhar, thereby obscuring the true nature of the financial transactions flowing through them. Investigations have already identified these businesses, each currently undergoing intense scrutiny.
Fabricated Invoices and Transactions
Police found numerous forged bills associated with the supposed mentha trade. One invoice itemized twelve drums of mentha oil worth ₹31 lakh, while another documented nineteen drums totaling ₹47 lakh. A third bill showcased a staggering ₹65 lakh without providing specific quantities of mentha oil. Despite these claims of extensive trading, investigators found no concrete evidence of actual business activities conducted by any of the registered firms.
Linking to a Wider Network
The overarching link between this hawala network and Uttarakhand has become increasingly apparent. Connections to adjacent areas, including Badaun and Shahjahanpur, have also emerged in addition to potential links with unscrupulous operators in Nepal. Investigators are currently analyzing call detail records (CDRs) from the arrested individuals to trace financial trails and uncover a more extensive web of criminal activity.
A Recognizable Pattern in Hawala Operations
The Future Crime Research Foundation (FCRF) has pointed out that this type of financial operation follows a familiar pattern seen in numerous hawala cases. Vulnerable individuals are often used to create a façade for illicit operations, with the actual masterminds remaining in the shadows. Consequently, when law enforcement steps in, the account holders become the primary targets, often unaware of the illegal activities for which they are being held responsible.
Ongoing Investigations and Public Safety Advisories
The police have identified the ringleader, known as Neetu, a hawala operator from Shahjahanpur, who is currently on the run. Amit Gupta has admitted to executing transactions under Neetu’s directives for the purpose of transforming illicit black money into white currency. Following their arrest, both Shahid and Amit were presented in court and are now in judicial custody.
Authorities have emphasized that the evidence surrounding ₹23.65 crore routed through a single account suggests that the hawala operation could be even more extensive than initially thought. As the investigation unfolds, further arrests may occur, and tax authorities are likely to get involved.
In light of these developments, law enforcement is urging the public to exercise caution and refrain from opening bank accounts or businesses at the request of others. The legal responsibility for any financial wrongdoing ultimately falls on the individual account holders, regardless of their claims of ignorance regarding the transactions.
This case serves as a stark reminder of how hawala networks exploit vulnerable individuals to facilitate money laundering and why staying informed and cautious remains essential in safeguarding against such illicit financial activities.


