KOCHI: The investigation conducted by the state GST intelligence department has found illegal sales of diesel worth crores, done by evading tax.

Inspections were conducted at 20 locations in Ernakulam, Kollam and Pathanamthitta districts on Tuesday. The scam involves selling diesel purchased from Manguluru in Kerala, without paying tax to the state. According to a preliminary assessment, a fraud of Rs 72 crore is feared to have taken place.

According to the Kerala General Sales Tax Act, the first sale of diesel has to be taxed in the state. However, this rule was violated and the diesel was brought to Kerala in the pretence of personnel needs, but was sold to mint profits.

During the sudden inspection conducted on Tuesday, boats with illegal diesel were caught by officials. The people caught argued with police saying it was their private boats but they failed to submit the required documents to strengthen their claims. Further action will be taken after giving the notice. If the documents are not produced in the allowed time, strict action will be taken including a fine.