The Directorate General of GST Intelligence (DGGI) has reportedly arrested All-India Furnace Association president KK Garg and his son in connection with an alleged bogus billing scam. Sources said the case pertained to the 2020-21 financial year and involved alleged GST evasion of Rs 10-15 crore.The development has triggered panic among industrialists in Ludhiana and Mandi Gobindgarh, particularly those associated with the steel and furnace industry. Several industry representatives have alleged high-handedness on the part of the authorities.Sources said Garg was picked up by the DGGI yesterday for questioning and was formally arrested late last night. However, the department is tight-lipped over the matter. Talking to The Tribune, World MSME Forum president Badish Jindal criticised the action, alleging that the Central GST department was adopting an “autocratic approach” in its efforts to boost revenue collections.“We have written to the Union Finance Minister highlighting the conflict between Section 16(2) and Section 158 of the CGST Act, 2017, and its adverse impact on the industry. For instance, if a buyer purchases scrap from a dealer, he pays all dues as per norms, but he does not know from where the scrap dealer got the material. The dealer may be the third or fourth party. Now, if the other three parties had evaded tax or purchased material on bogus bills, how would a genuine buyer know about it? But the department tightens the grip on the end buyer and he becomes the scapegoat. The same has happened with Garg,” said Jindal.Voicing concern over the department’s “bullying” tactics, Furnace Association, Mandi Gobindgarh, president Mohinder Gupta said Section 16(2)(C) of the GST Act was against the industry and that the department had adopted a high-handed approach. “We get bills from the supplier and conduct our business in a transparent manner. But if an unscrupulous trader has sold material through unethical means and subsequently shut down operations or become untraceable after committing fraud, why should genuine buyers be held accountable? It is the duty of the department to act against the defaulters. Why are honest businessmen being penalised for this?” asked Gupta, who said he had filed a PIL in the court, but there had been no outcome till date.Jindal said the alleged legal inconsistency was causing widespread fear and operational instability within the industry. Unless urgent reforms were introduced, it would adversely affect manufacturing growth, employment generation and overall economic stability, he added.In the letter to the Finance Minister, Jindal said, “We request your urgent intervention to resolve this statutory conflict in the interest of justice, ease of doing business and protection of genuine taxpayers.”