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Sunday, May 29, 2022

GST Intelligence arrests Kairali TMT owner Humayoon Kalliyath for Rs. 43 crore tax fraud

Officers from the Goods and Services Tax (GST) Intelligence department uncovered a GST fraud worth an estimated Rs. 43 crore from Kerala. Following the discovery, the Kochi Zonal Unit of Central GST Intelligence arrested Humayoon Kalliyath, executive director of Kairali Steels & Alloys (P) Ltd. (Kairali TMT).

Mainstream media who have benefited from their advertisements did not report the arrest. Kairali TMT is a leading company in Kerala and has actor Mohanlal as its brand ambassador. The company also claims that  Steel Authority of India Limited (SAIL) has chosen Kairali TMT as their only conversion agent in Kerala.

Kairali TMT is also a shady organization with alleged links to the controversial Zakir Naik promoted Peace International School and the Chief Minister of Kerala, Pinarayi Vijayan. It is alleged that the company laundered crores of black money between November 9 and 17 when demonetization was declared on November 8, 2016. It is also facing a Central Bureau of Investigation (CBI) probe for bribing Central Excise officials who helped them evade excise duty from 2014 to 2017. 

The company also uses Hindu names while registering companies, and their steel casting company registered in Coimbatore is Sri Kumaran Steels India Private Limited. Such operators are allegedly behind the economic jihad in Kerala and Bharat. Most of the partners in the firm are from Kozhikode, and more critically, they have been in business for the past several decades. 

The Directorate General of GST Intelligence (DGGI) recently detected the massive GST evasion. Their investigation revealed that a cartel of units in Kerala’s steel industry issued invoices valued at about Rs. 400 crore to fictitious beneficiaries. The company passed on fake input tax credits to facilitate the evasion of GST.

They found that Kairali TMT, a leading supplier of steel bars in Kerala with factories in Palakkad and Salem, is the primary beneficiary of the racket. The matter came to light after Mathew M Jolly, principal additional director general, Directorate General of GST Intelligence, Kochi zonal unit, issued a press release.

“Officers of the DGGI units at Thiruvananthapuram, Kochi, and Kozhikode conducted simultaneous search operations at various premises in Kerala and recovered several incriminating documents. Preliminary investigations reveal that the cartel issued fake invoices valued at about Rs 400 crore to ultimate beneficiaries, thereby passing on fake input tax credit of GST amounting to about Rs 43 crore,” the DGGI release said. The cartel used non-performing Benami companies for fake billing.

Kalliyath was booked under Section 69 and Section 132 of the CGST Act, 2017. He was produced before the Additional Chief Judicial Magistrate, Thiruvananthapuram, and remanded to judicial custody for 14 days. Interestingly these are minor charges, and even an ordinary lawyer can free the accused within a few months. 

In late 2016, Kalliyath did business transactions worth crores using banned Rs 500 and Rs 1000 notes without proper bills. They conducted transactions in trenches of 10 lakh to 50 lakh between November 9 and November 17. They ran a parallel accounting system where they presented one set of books to the government while maintaining a secret accounting system at their Kozhikode office. The investigating officer promised a detailed report and a future course of action, but nothing happened.

Noor Muhammed Noorsha Kalliyath is the Chairman of the Kalliyath Group of companies and the managing trustee of Peace International School. In July 2016, many youngsters who had allegedly joined the Islamic State had worked in schools of this chain. In 2018, MM Akbar, widely known as Kerala’s Zakir Naik, who runs the Peace group of schools, was arrested, but our courts immediately released him, mentioning technicalities. 

In February 2017, the Income Tax Department, Kozhikode, conducted raids at the official and residential premises of Kalliyath Group in Kozhikode and Palakkad and seized several documents. In December 2019, the CBI registered an FIR that said that a scrutiny of the records unearthed an unaccounted income of Rs 279.34 crore. 

They registered a case against Abdul Gafoor, MD, Kairali Steels, and Alloys Private Limited; the company itself; Noor Mohammed Noorshah, MD, Kalliyath Steel Traders, Ernakulam, and ‘unknown officials’ of Central Tax and Central Excise in Kozhikode and Palakkad. The accused were charged with criminal conspiracy, cheating, a public servant taking gratification other than legal remuneration, abetting public servants to commit offenses, and criminal misconduct. The progress of that case remain unknown.

Last year, Muslim clerics and the Haj Committee made it clear that they will not guide Muslims if they choose to file their tax returns as per the law, thereby tacitly encouraging them to defy the law. With our premier investigating agencies displaying such an ‘enviable’ track record and with judiciary going easy on the accused, there are fears that Humayoon will be out in no time. Economic jihad against Hindus, using Hindu names, will continue unabated.  The only positive is that a few systems in the new GST bill have checks and balances. 

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