Fruit Export Hub Turns Garment Godown: KAPPEC–GST Vigilance Crack Down, Fiza Global MD Summoned
KAPPEC cancels operator contract at Poojenahalli cold chain facility near Bengaluru airport after detecting misuse, lease default and suspected GST violations; garments seized from banana processing hall.
OOB News Desk 
Bengaluru | March 6 :
A government-built horticulture export facility near Kempegowda International Airport has come under scrutiny after tax authorities discovered ready-made garments stored inside a banana processing hall meant exclusively for fruit export operations, triggering enforcement action by both the Karnataka Commercial Taxes Department and the Karnataka State Agricultural Produce Processing and Export Corporation Limited (KAPPEC).
The integrated pack house and cold chain facility located at the Poojenahalli Horticulture Zone in Devanahalli taluk was established by KAPPEC to support processing, storage and export of fruits and vegetables for farmers, farmer-producer organisations and horticulture exporters.
The facility had been handed over in June 2024 to Fiza Global Agroventures Private Limited for operation and maintenance under a formal agreement.
However, according to KAPPEC, the private operator allegedly failed to comply with the terms of the agreement from the beginning.
“The facility was leased strictly for processing and export of fruits and vegetables. Storing unrelated goods such as garments within the premises is a clear misuse of the infrastructure and a violation of the agreement,” an official said.
Lease Defaults and Contract Termination
Officials stated that the company also defaulted on payment of stipulated lease rentals despite repeated notices issued by KAPPEC.
Following the continued violations, the corporation invoked the bank guarantee submitted by the company and terminated the contract for breach of agreement.
Despite the termination order, the operator reportedly failed to hand over possession of the facility and its infrastructure back to KAPPEC, prompting further scrutiny by authorities.
Suspicious Goods Movement Triggers Inspection
KAPPEC officials subsequently noticed frequent movement of goods vehicles inside the premises, raising suspicion about the nature of activities being carried out within the facility.
The matter was formally reported to the Commercial Taxes Department (Vigilance) on March 2.
Acting on the information, vigilance officials conducted an inspection at the premises.
During the inspection, authorities reportedly found ready-made garments stored inside the banana processing hall without supporting tax documents or invoices.
Staff present at the unit were unable to produce valid records relating to the goods.
Considering the absence of documentation and the possibility of tampering with evidence, the inspection team sealed the hall under provisions of the Central Goods and Services Tax (CGST) Act, 2017.
GST Investigation and MD Summons
The case has since escalated into a formal GST investigation.
The Assistant Commissioner of Commercial Taxes (Vigilance-02) has issued a summons to Bava Mohammed Farookh, Managing Director of Fiza Global Agroventures Private Limited, directing him to appear before tax authorities on March 10, 2026 at 11 AM.
The notice has been issued under Section 70 of the Karnataka Goods and Services Tax (KGST) Act, 2017, read with provisions of the CGST and IGST Acts, which empower authorities to summon individuals to produce documents and give evidence during tax proceedings.
Authorities have sought detailed records including:
Inventory of taxable goods stored at the facility
Original invoices and e-way bills
Payment and transaction records
Any additional documents related to storage or movement of goods
Officials also warned that failure to comply with the summons may attract legal consequences, including proceedings under Sections of the Bharatiya Nyaya Sanhita, 2023.
Misuse of Farmer Infrastructure
KAPPEC has emphasised that the integrated cold chain facility was created using public resources to strengthen Karnataka’s horticulture export ecosystem.
According to CN Shivaprakash, MD, KAPPEC, such misuse undermines the objective of supporting farmers and export enterprises.
“The infrastructure has been developed to benefit farmers, farmer-producer organisations, entrepreneurs and exporters involved in horticulture. Any misuse of the facility defeats this purpose and violates the contractual obligations,” he said.
The Commercial Taxes Department and KAPPEC are continuing their investigation, and further action is expected following the appearance of the company’s Managing Director before vigilance officials next week.
