MM TAX CLUB

The Directorate of Enforcement (ED), Jaipur Zonal Office, has arrested Baljeet Yadav, former MLA from the Behror constituency, Rajasthan, on 3rd February 2026 under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. The arrest is linked to an ongoing investigation into the alleged embezzlement of ₹2.87 crore of MLA-LAD funds during his tenure as an MLA from 2018 to 2023.

Alleged Modus Operandi of the Scam

According to the ED’s invest

The funds were officially sanctioned for the purchase of sports equipment for 32 government schools in his constituency. However, instead of following transparent procurement norms, multiple private firms were allegedly created and controlled indirectly by Yadav and his associates.

These firms included:

• M/s Balaji Complete Solution Pvt. Ltd.

• M/s Surya Enterprises

• M/s Rajput Sports Enterprises

• M/s Sharma Sports Enterprises

The investigation revealed that these entities were incorporated using the identity documents of employees and associates, had no prior experience in sports equipment trading, and were formed after administrative and financial approvals had already been granted by Zila Parishad, Alwar.

Tender Manipulation and Fake Billing

ED found that tenders were issued in violation of prescribed procurement rules, deliberately restricting competition to ensure that contracts were awarded to the above entities. Inferior quality sports goods were allegedly procured in cash, while inflated bills were submitted to Panchayat Samiti, Neemrana, which were subsequently sanctioned.

Money Laundering Trail

Bank account analysis conducted by ED revealed that the funds received by these firms were diverted to the relatives and associates of Baljeet Yadav. A portion of the funds was used to purchase properties in their names. These properties were later sold, and the proceeds were routed back to the firms, with a large part of the money ultimately withdrawn in cash, indicating classic layering and laundering of proceeds of crime.

Searches and Seizures

Earlier, on 24th January 2025, ED conducted search operations at nine locations across Jaipur and Dausa (Rajasthan) and Rewari (Haryana) under the provisions of PMLA, 2002. During these searches, the agency seized:

• ₹31 lakh in cash

• Incriminating documents and records

• Multiple digital devices

These seizures provided crucial evidence establishing the laundering of MLA-LAD funds.

Legal Proceedings and Custody

Following his arrest, Baljeet Yadav was produced before the Special PMLA Court, Jaipur, which granted three days of ED custody for further investigation.

The ED investigation stems from FIR No. 287/2024 dated 12.12.2024, registered by ACB, Jaipur, under:

• Sections 7(c), 13(1)(a), 13(2) of the Prevention of Corruption Act, 1988

• Sections 409 and 120B of the IPC, 1860

• Section 41 of the Rajasthan Transparency in Public Procurement Act, 2012

These offences are classified as scheduled offences under PMLA, enabling ED to take action.

What Lies Ahead

The ED has stated that further investigation is ongoing, and more details may emerge as the financial trail is examined in depth. The case highlights the serious consequences of misuse of public funds and the increasing scrutiny of political corruption through financial investigation laws like PMLA.

igation, Baljeet Yadav was the key conspirator in misappropriating MLA-LAD funds by manipulating the procurement process meant for public welfare. 

In a significant development highlighting serious concerns over misuse of the insolvency framework, the Directorate of Enforcement (ED), Gurugram Zonal Office, has arrested Arvind Kumar, former Resolution Professional (RP) of M/s Richa Industries Limited (RIL), under the provisions of the Prevention of Money-laundering Act (PMLA), 2002.

The arrest was made on 3 February 2026, and Arvind Kumar was produced before the Hon’ble Special Court, Gurugram, which has granted 8 days of ED custody. Earlier, the ex-promoter and suspended Managing Director, Sandeep Gupta, had already been arrested under Section 19 of the PMLA in the same case.

Background of the Case

The ED initiated its investigation based on an FIR registered by the CBI under various provisions of the IPC, 1860 and the Prevention of Corruption Act, 1988. The allegations relate to criminal conspiracy, cheating, and criminal misconduct, which resulted in wrongful gains to the accused and caused losses of around ₹236 crore to public sector banks during the period 2015 to 2018.

Alleged Role of the Resolution Professional

According to the ED’s investigation, Arvind Kumar was not merely negligent but actively involved in money laundering and personal enrichment during his tenure as RP (December 2018 to June 2025).

The probe revealed that:

• Substantial funds of Richa Industries Limited were diverted through layered transactions to individuals and entities closely connected to him, including associates and employees linked to his own business interests.

• Large payments were routed from the corporate debtor’s accounts to intermediaries, who later transferred significant amounts back to Arvind Kumar’s personal bank accounts.

• Bank records show unexplained cash deposits exceeding ₹80 lakh in his personal accounts during his tenure.

• Credits of over ₹1 crore were received from related parties who had earlier benefited from payments made by the company.

These findings indicate that the RP allegedly projected illicit funds as legitimate receipts, disguising them as part of CIRP-related operations.

Key Modus Operandi Alleged by ED

The ED has outlined several serious violations allegedly committed by the RP, including:

• Manipulation of the Committee of Creditors (CoC) by admitting sham and inflated claims of unsecured financial creditors, many of them dummy entities controlled by ex-promoters, thereby sidelining genuine public sector bank creditors.

• Facilitating diversion and siphoning of crores of rupees during the CIRP under the guise of sub-contracts, remuneration, and operational payments.

• Collusion with suspended promoters, allowing them continued operational control and decision-making powers.

• Deliberate non-filing of avoidance applications under IBC despite clear red flags of preferential, undervalued, fraudulent, and extortionate transactions highlighted in audit reports.

• Forwarding ineligible resolution plans submitted by promoter-controlled entities in violation of Section 29A of the IBC, with the intent of restoring assets to the very persons who committed the fraud.

• Collecting crores from third parties on the pretext of sale of company assets without authorization or proper documentation.

Impact on Public Sector Banks

Due to the alleged “pro-promoter” conspiracy, public sector banks suffered a staggering 94% haircut. After liquidation of Richa Industries Limited, banks recovered only ₹40 crore against admitted claims of ₹708 crore.

It is also noteworthy that the IBBI had earlier suspended Arvind Kumar’s registration for two years for related contraventions.

Why This Case Matters

The ED has emphasized that such alleged misuse of the insolvency process:

• Defeats the very objective of the Insolvency and Bankruptcy Code,

• Undermines creditor confidence, and

• Erodes public trust in the financial and insolvency systems.

Further investigation is ongoing to trace the complete flow of funds and identify all persons involved.

As per Rule 59(6) of the CGST Rules (read with Sections 39 and 47), where a registered person fails to furnish returns for a continuous period of three years, the GST system bars filing of subsequent returns. 

Once this system-level barring is triggered:
✅ The relevant return period becomes non-editable
✅ The taxpayer is technically prevented from filing the pending return

 GSTN has now enabled an online application
 
✅ Taxpayer can apply under Services → Returns → Application for Unbarring Returns
✅ Reasons for non-filing must be clearly stated
✅ Application is routed to the Jurisdictional Assessing Officer
✅ Upon satisfaction, the AO may approve unbarring
✅ Once approved, the barred return becomes available for filing

On 1 February 2026, India’s Union Budget for FY 2026–27 was tabled in Parliament by Nirmala Sitharaman, marking a significant moment in the country’s economic journey. This Budget is special not just for its scale, but because it is the first Budget prepared in Kartavya Bhawan, guided by a strong sense of duty (Kartavya) towards citizens and the nation.

At its core, the Budget reflects a clear vision: accelerated growth, empowered people, and inclusive development—all aligned with the goal of Viksit Bharat.

The Three Kartavyas: The Soul of Budget 2026–27

The Finance Minister structured the Budget around three guiding duties:

1️⃣ Accelerating and Sustaining Economic Growth

By strengthening productivity, competitiveness, manufacturing capacity, infrastructure, and resilience against global uncertainties.

2️⃣ Fulfilling Aspirations and Building Capacity

Ensuring people—especially youth, women, professionals, MSMEs, and farmers—are equipped to actively participate in India’s growth story.

3️⃣ Sabka Sath, Sabka Vikas

Guaranteeing that every family, region, and sector has access to opportunities, resources, and dignity.

Big Numbers, Strong Discipline

• Total Expenditure: ₹53.5 lakh crore
• Non-Debt Receipts: ₹36.5 lakh crore
• Capital Expenditure: ~₹11 lakh crore
• Fiscal Deficit (BE 2026–27): 4.3% of GDP
• Debt-to-GDP Ratio: Reduced to 55.6%

These numbers signal growth with fiscal responsibility, keeping long-term stability firmly in focus.

First Kartavya: Powering Growth Through Industry & Infrastructure

 Manufacturing in Strategic Sectors

• Biopharma SHAKTI with ₹10,000 crore outlay to make India a global biologics hub
• India Semiconductor Mission 2.0 to strengthen chip design, IP, and supply chains
• Boost to electronics components manufacturing (₹40,000 crore)
• Dedicated Rare Earth Corridors in mineral-rich states
• New Chemical Parks and advanced Hi-Tech Tool Rooms

 Textile Sector Transformation

From fibre to fashion, the integrated textile programme focuses on:

• Natural & man-made fibres
• Mega Textile Parks
• Handloom, handicrafts & khadi revival
• Global branding, skilling, and market linkages

 Infrastructure Push

• Public capex raised to ₹12.2 lakh crore
• New Dedicated Freight Corridors and 20 National Waterways
• Coastal cargo promotion & seaplane connectivity
• Seven High-Speed Rail Corridors connecting major growth centres

First Kartavya: Powering Growth Through Industry & Infrastructure

Manufacturing in Strategic Sectors

• Biopharma SHAKTI with ₹10,000 crore outlay to make India a global biologics hub
• India Semiconductor Mission 2.0 to strengthen chip design, IP, and supply chains
• Boost to electronics components manufacturing (₹40,000 crore)
• Dedicated Rare Earth Corridors in mineral-rich states
• New Chemical Parks and advanced Hi-Tech Tool Rooms

 Textile Sector Transformation

From fibre to fashion, the integrated textile programme focuses on:

• Natural & man-made fibres
• Mega Textile Parks
• Handloom, handicrafts & khadi revival
• Global branding, skilling, and market linkages

 Infrastructure Push

• Public capex raised to ₹12.2 lakh crore
• New Dedicated Freight Corridors and 20 National Waterways
• Coastal cargo promotion & seaplane connectivity
• Seven High-Speed Rail Corridors connecting major growth centres

Third Kartavya: Inclusion, Farmers & Regional Balance

 Farmers First

• Integrated development of 500 reservoirs and Amrit Sarovars
• Support for high-value crops like coconut, cocoa, and sandalwood
• Launch of Bharat-VISTAAR, a multilingual AI platform integrating AgriStack and ICAR

 Social Empowerment

• Divyangjan Kaushal Yojana for job-oriented skilling
• Expansion of mental health care with NIMHANS-2 and upgraded regional institutes

Regional Growth

• East Coast Industrial Corridor
• Tourism destinations in Purvodaya states
• Buddhist circuit development in the North-East
• 4,000 e-buses for sustainable mobility

Major Tax Reforms: Simpler, Fairer, Modern

???? New Income Tax Act, 2025

• Effective from April 2026
• Simplified rules & redesigned forms
• Extended timelines for return revisions
• Relief for small taxpayers and NRIs

 IT & Global Investment Boost

• Unified IT services category with 15.5% safe harbour
• Safe harbour threshold raised to ₹2,000 crore
• Tax holiday till 2047 for foreign cloud service providers using Indian data centres

 Rationalised Penalties

• Fewer prosecutions
• Decriminalisation of minor technical defaults
• One-time foreign asset disclosure window

Customs & Ease of Doing Business

• Import duty on personal goods cut from 20% to 10%
• Exemptions for critical minerals, lithium-ion batteries, drugs, and rare diseases
• Single digital window for cargo clearance
• Trust-based customs systems and faster exports for MSMEs and startups
• Final Takeaway
• The Union Budget 2026–27 is not just a financial document—it is a statement of intent. It combines ambition with inclusion, technology with tradition, and growth with responsibility.
• By putting people, productivity, and purpose at the centre, this Kartavya-driven Budget lays a strong foundation for India’s next phase of development—confident, inclusive, and future-ready.