Uflex I-T raids: Rs 1,500 crore allegations 2023 explained

What triggered the Uflex tax investigation

The Income Tax Department conducted search operations linked to packaging solutions provider Uflex Limited after receiving inputs alleging large cash sales and possible tax evasion. In one account of the action, the department said it acted on complaints of cash sale of over INR 1,000 crore by the company over the past four to five years. The same account also put Uflex’s turnover at over INR 3,000 crore. The searches and subsequent reporting triggered a public back-and-forth between the authorities’ claims and the company’s regulatory disclosures.

Uflex is described as India’s largest flexible packaging materials and solutions company and a leading global polymer sciences corporation. The case drew market attention because the allegations referenced high-value transactions and a large network of suspected shell or dummy entities. Media reports also cited seizure of documents and digital hardware, while Uflex denied that anything incriminating was seized.

First phase: raids at 37 premises in nine cities

In an earlier search phase described by the Income Tax Directorate of Investigation, raids began at 8.30 AM at 37 premises associated with Uflex Limited, owned by Ashok Chaturvedi. Director General, Income Tax (Investigation) Krishna Saini said searches were carried out in nine cities: New Delhi, Mumbai, Thane, Bhind, Alwar, Dehradun, Jammu, Haridwar and Noida. According to Saini, the raids detected bogus sale of INR 100 crore.

Saini also said unaccounted cash of INR 2 crore and jewellery were found, and that locker-opening procedures were underway. He added that during inquiry, genuine sale was not found and that seven bogus concerns were identified where sale of INR 100 crore was claimed. The official also said 20 to 25 companies associated with Uflex were suspected to be bogus or dummy, and that over INR 1,000 crore had come into the company from unknown sources.

Scale-up: searches across 80-plus locations and multiple states

Subsequent reporting described a wider operation. Official sources were cited as saying searches were launched on February 21 at multiple premises across various states, including Uflex’s head office in Noida, as part of a tax evasion investigation. Some reports said the raids were carried out at more than 80 locations of the Uflex Group in eight states.

One report said tonnes of documents, 120 hard disks and 50 diaries containing information related to alleged bogus transactions were recovered during the raids. It also said the Income Tax Department detected irregularities of about INR 1,500 crore and seized documents related to bogus transactions worth INR 1,000 crore. Another account said the searches concluded after six days and claimed “evidence” to the tune of INR 4,000 crore and unaccounted income of around INR 1,001 crore.

PTI reporting: Rs 500 crore transactions and sealed premises

A PTI report cited in the text said fraudulent transactions worth INR 500 crore were unearthed. It also said two premises belonging to the company in Noida (Uttar Pradesh) and Shahdara in Delhi were sealed. Alongside these reports, Uflex denied allegations of fraudulent transactions.

Separately, another market-focused report said Uflex shares extended a declining trend for a seventh session and fell as much as 15 percent to near two-year lows, linking the fall to reports of raids at over 70 locations affiliated with the company.

Uflex’s response: “not seized anything incriminating”

Uflex said in a regulatory filing that the Income Tax Department had “not seized anything incriminating” in searches conducted for seven consecutive days. The company said that for the period February 21 to February 27, 2023, stocks of raw materials, finished goods, work in process and other assets were found to be duly recorded, and books of accounts were found to be in order.

The company “vehemently” denied media reports alleging bogus transactions, seizure of evidence, irregularities running in thousands of crores and huge unaccounted income. It described such reports as “frivolous and baseless” and said it adhered to good business practices. Uflex also said it would keep the public, investors and authorities updated as per applicable SEBI provisions.

What officials said about manpower and enforcement measures

In the 37-premises account, the department said the operation was led by Director, Income Tax (Investigation) Ashok Tirpathi. It also said the raid involved 50 officers, 100 income tax inspectors and four platoons of CRPF.

In the wider, multi-location reporting, sources said more than 900 income tax officials were involved in searches across the country, and at least 200 officials were involved in searches at the Noida premises. The same reporting said the department sealed 28 bank lockers linked to the company and officials, which would be opened as per procedure.

Key numbers and claims at a glance

Timeline of reported events

Market impact and what investors can track next

The episode created uncertainty because multiple reports carried different figures on alleged irregularities, seizures and suspected networks of shell entities. For investors, the immediate market impact referenced in the text was a sharp decline in Uflex shares, with one report stating a fall of up to 15 percent and a seventh straight session of decline.

On the facts available in the text, the next steps depend on the Income Tax Department’s post-search assessment process, scrutiny of recovered documents and digital hardware, and any formal statement from the department about seizures. Uflex has publicly maintained that nothing incriminating was seized and that records were duly maintained. The divergence between official-source reporting and the company’s filing is a key point investors will watch as the matter progresses.

Conclusion

Income Tax searches linked to Uflex produced a series of reported claims around alleged bogus sales, suspected shell entities, sealed premises, and recoveries of documents and digital devices. Uflex has denied wrongdoing in a regulatory filing and said nothing incriminating was seized during the February 21 to February 27, 2023 searches. Further clarity is expected from the tax department’s assessment and any official statements detailing the findings and next procedural steps.