Himachal Pradesh High Court
Gagandeep Singh And Another vs State Of H.P. And Another on 23 June, 2025
Neutral Citation No. ( 2025:HHC:19372 )
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. MMO No. 338 of 2024
Reserved on: 27.05.2025
Date of Decision: 23rd June, 2025.
Gagandeep Singh and another. …Petitioners
Versus
State of H.P. and another. …Respondents
Coram
Hon’ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 Yes
For the Petitioners : Mr. Dinesh Singh Rawat and
Mr. Anil Chauhan, Advocates.
For the respondent/State : Mr. Prashant Sen, Deputy
Advocate General.
Rakesh Kainthla, Judge
The petitioner has filed the present petition for
quashing of Complaint No. GST/01/2018 filed under Section 69
read with Section 132 of Himachal Pradesh Goods and Services
Tax (HPGST)/Central Goods and Services Tax (CGST) Act read
with Section 20 of Integrated Goods and Services Tax Act (IGST)
pending before learned Additional Chief Judicial Magistrate
(ACJM), Kasauli along with subsequent proceedings. (Parties
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
2
Neutral Citation No. ( 2025:HHC:19372 )
shall hereinafter be referred to in the same manner as they are
arrayed before the learned Trial Court for convenience.)
2. Briefly stated, the facts giving rise to the present
petition are that the complainant filed a complaint against the
petitioners/accused for the commission of offences punishable
under Section 69 read with Section 132 of HPGST/CGST Act,
2017, read with Section 20 of the IGST Act, 2017. It was asserted
that M/s G.M. PowerTech is a registered taxable person
consisting of a partnership firm of Gagan Deep Singh and
Jatinder Mohan (the present petitioners/accused). Information
was received from reliable sources that the petitioners indulged
in large-scale evasion of tax by availing the fraudulent input tax
credit during the years 2017-18 and 2018-19. They declared
inward supplies (purchases) from Delhi and U.P.-based floating
fictitious and non-existent firms, which were registered to pass
on the fraudulent benefit of input tax credit on the strength of
fake invoices. The matter was examined on the GST Portal, and
it was verified that several consignments were delivered in two-
wheelers, three-wheelers or cars. The registration numbers of
many vehicles declared to have transported the goods from
outside the State were found to be fake. The consignments were
3
Neutral Citation No. ( 2025:HHC:19372 )
also transported in cars, but it was not possible to transport
such heavy goods in cars. Goods worth ₹ 2,89,26,299/- were
declared to have been transported by a fake or non-existent
vehicles. Input tax credit (ITC) of ₹ 61,69,147/- was claimed.
The search warrant was issued to ASTEO-Rupinder Singh, and
the business premises of the taxpayer were searched. Inquiry
under Section 70 of the Act was initiated on 05.11.2018. The
summons were issued to the suppliers M/s Om Metals, M/s
Ridhi Alloys and M/s SD Enterprises; however, these were
returned with the report of an unknown address. A team led by
ASTEO-Rupinder Singh was deputed to physically verify the
suppliers. ASTEO visited the premises and found that no such
entities existed at the given address. They were asked to make
inquiries about the residential address, but the addresses were
found to be fake. G.M. Powertech claimed input tax credit
fraudulently worth ₹ 9,21,30,291/- in respect of a non-existent
supplier namely M/s SD Enterprises, M/s OM Metals and M/s
Ridhi Alloys; hence, a complaint was filed before the Court for
taking action as per the law.
4
Neutral Citation No. ( 2025:HHC:19372 )
3. Learned Trial Court found sufficient reasons to
summon the accused and listed the matter for recording pre-
charge evidence on 15.01.2024.
4. Being aggrieved from the filing of the complaint and
the proceedings pending before the learned Trial Court, the
petitioners have filed the present petition asserting that the
provisions of HPGST/CGST and IGST Acts are silent regarding
the arrest, investigation and filing of the complaint. HPGST Act
has made the provisions of search and seizure provided under
Cr.P.C. applicable to the HPGST Act. The Officers under the Act
have been given unbridled powers. The provisions of Sections 69
and 132 are arbitrary and unreasonable. It is violative of Article
21 of the Constitution of India; hence, the present petition.
5. The petition is opposed by filing a reply taking
preliminary objections regarding the petitioners being estopped
by their act, deed and conduct to file the present petition and the
petitioners having no prima facie case in their favour. It was
asserted that the petitioners are the partners of M/s G.M.
Powertech. They availed input tax credit of ₹ 15,86,49,362/- by
conducting their business in violation of the CGST and HPGST
5
Neutral Citation No. ( 2025:HHC:19372 )
Act. The petitioners were liable to be arrested for the violation as
per Sections 69 and 132 of the Act. The provisions of arrest are
governed by the Cr. P.C. The provisions of Cr.P.C. will also apply
to the investigation and filing of the complaint as per Section
4(2) read with Section 5 of the Cr. P.C. The premises of the
petitioners were searched under the due authority as per Section
67 of CGST. The petitioners were summoned to provide the
record or other information. They initially provided the record
through their counsel, but thereafter, they failed to appear. The
investigation regarding the validity of suppliers was carried out,
and it was found that no such supplier existed at the given
address; therefore, it was prayed that the present petition be
dismissed.
6. I have heard Mr. Dinesh Singh Rawat and Mr. Anil
Chauhan, learned counsel for the petitioners and Mr. Prashant
Sen, learned Deputy Advocate General, for the respondent/State.
7. Mr. Dinesh Singh Rawat, learned counsel for the
petitioners, submitted that the HPGST/CGST Act does not
provide for investigation and filing of the complaint. The
investigation was carried out by the officials of the department,
6
Neutral Citation No. ( 2025:HHC:19372 )
which materially prejudiced the petitioners. The continuation of
the proceedings before the learned Trial Court amounts to an
abuse of the process of the law. Learned Trial Court wrongly
fixed the matter for pre-charge evidence; therefore, it was
prayed that the present petition be allowed and the proceedings
pending before the learned Trial Court be quashed. He relied
upon the judgment of the Hon’ble Supreme Court in Mukesh
Singh versus State (Narcotic Branch of Delhi), AIR 2020 SC 4794, in
support of his submission.
8. Mr. Prashant Sen, learned Deputy Advocate General,
for the respondent/State submitted that the provisions of Cr.P.C.
apply to the investigation and trial conducted under
HPGST/CGST Act as per Section 4 (2) read with Section 5 of Cr.
P.C. Therefore, the submission that unguided and unbridled
powers have been conferred upon the authorities is not correct.
The judgment in Mukesh Singh (supra) does not apply to the
present case; therefore, he prayed that the present petition be
dismissed.
9. I have given considerable thought to the submissions
made at the bar and have gone through the records carefully.
7
Neutral Citation No. ( 2025:HHC:19372 )
10. The law relating to quashing of criminal cases was
explained by the Hon’ble Supreme Court in B.N. John v. State of
U.P., 2025 SCC OnLine SC 7 as under: –
“7. As far as the quashing of criminal cases is concerned,
it is now more or less well settled as regards the
principles to be applied by the court. In this regard, one
may refer to the decision of this Court in State of
Haryana v. Ch. Bhajan Lal, 1992 Supp (1) SCC 335, wherein
this Court has summarised some of the principles under
which FIR/complaints/criminal cases could be quashed in
the following words:
“102. In the backdrop of the interpretation of the
various relevant provisions of the Code under Chapter
XIV and of the principles of law enunciated by this
Court in a series of decisions relating to the exercise of
the extraordinary power under Article 226 or the
inherent powers under Section 482 of the Code which
we have extracted and reproduced above, we give the
following categories of cases by way of illustration
wherein such power could be exercised either to
prevent abuse of the process of any court or otherwise
to secure the ends of justice, though it may not be
possible to lay down any precise, clearly defined and
sufficiently channelised and inflexible guidelines or
rigid formulae and to give an exhaustive list of myriad
kinds of cases wherein such power should be
exercised.
(1) Where the allegations made in the first
information report or the complaint, even if they
are taken at their face value and accepted in their
entirety, do not prima facie constitute any offence
or make out a case against the accused.
(2) Where the allegations in the first
information report and other materials, if any,
accompanying the FIR do not disclose a
8
Neutral Citation No. ( 2025:HHC:19372 )cognizable offence, justifying an investigation
by police officers under Section 156(1) of the
Code except under an order of a Magistrate
within the purview of Section 155(2) of the Code.
(3) Where the uncontroverted allegations made
in the FIR or complaint and the evidence
collected in support of the same do not disclose
the commission of any offence and make out a
case against the accused.
(4) Where the allegations in the FIR do not
constitute a cognizable offence but constitute only a
non-cognizable offence, no investigation is
permitted by a police officer without an order of a
Magistrate as contemplated under Section 155(2) of
the Code.
(5) Where the allegations made in the FIR or
complaint are so absurd and inherently
improbable based on which no prudent person
can ever reach a just conclusion that there is
sufficient ground for proceeding against the
accused.
(6) Where there is an express legal bar engrafted in
any of the provisions of the Code or the concerned
Act (under which a criminal proceeding is
instituted) to the institution and continuance of the
proceedings and/or where there is a specific
provision in the Code or the concerned Act,
providing efficacious redress for the grievance of the
aggrieved party.
(7) Where a criminal proceeding is manifestly
attended with mala fide and/or where the
proceeding is maliciously instituted with an
ulterior motive for wreaking vengeance on the
accused and to spite him due to a private and
personal grudge.” (emphasis added)
8. Of the aforesaid criteria, clause no. (1), (4) and (6)
would be of relevance to us in this case.
9
Neutral Citation No. ( 2025:HHC:19372 )
In clause (1) it has been mentioned that where the
allegations made in the first information report or the
complaint, even if they are taken at their face value and
accepted in their entirety do not prima facie constitute
any offence or make out a case against the accused, then
the FIR or the complaint can be quashed.
As per clause (4), where the allegations in the FIR do not
constitute a cognizable offence but constitute only a non-
cognizable offence, no investigation is permitted by a
police officer without an order dated by the Magistrate as
contemplated under Section 155 (2) of the CrPC, and in
such a situation, the FIR can be quashed.
Similarly, as provided under clause (6), if there is an
express legal bar engrafted in any of the provisions of
the CrPC or the concerned Act under which the criminal
proceedings are instituted, such proceedings can be
quashed.”
11. This position was reiterated in Ajay Malik v. State of
Uttarakhand, 2025 SCC OnLine SC 185, wherein it was observed:
“8. It is well established that a High Court, in exercising
its extraordinary powers under Section 482 of the CrPC,
may issue orders to prevent the abuse of court processes
or to secure the ends of justice. These inherent powers are
neither controlled nor limited by any other statutory
provision. However, given the broad and profound
nature of this authority, the High Court must exercise it
sparingly. The conditions for invoking such powers are
embedded within Section 482 of the CrPC itself, allowing
the High Court to act only in cases of clear
abuse of process or where intervention is essential to
uphold the ends of justice.
9. It is in this backdrop that this Court, over the
course of several decades, has laid down the principles
and guidelines that High Courts must follow before
quashing criminal proceedings at the threshold, thereby
10
Neutral Citation No. ( 2025:HHC:19372 )pre-empting the Prosecution from building its case
before the Trial Court. The grounds for quashing, inter
alia, contemplate the following situations : (i) the
criminal complaint has been filed with mala fides; (ii) the
FIR represents an abuse of the legal process; (iii) no prima
facie offence is made out; (iv) the dispute is civil in nature;
(v.) the complaint contains vague and omnibus
allegations; and (vi) the parties are willing to settle and
compound the dispute amicably (State of Haryana v.
Bhajan Lal, 1992 Supp (1) SCC 335)
12. The present petition is to be decided as per the
parameters laid down by the Hon’ble Supreme Court.
13. The applicability of the provisions of Cr.P.C to GST
Act was considered by Hon’ble Supreme Court in Radhika
Agarwal v. Union of India, (2025) 150 GSTR 121, and it was held
that the provisions of Cr.P.C. apply to the proceedings conducted
under GST Act if there is no provision to the contrary. It was
observed:
“13. Section 4(1) stipulates that offences under the Penal
Code, 1860, shall be investigated, inquired into, tried, and
otherwise dealt with by the Code. For offences under any
other local law, section 4(2) stipulates that they shall be
investigated, inquired, tried, or otherwise dealt with by
the Code, subject to any other enactment governing the
manner or place of investigation, inquiry, trying or
otherwise dealing. Section 5, the savings clause, clarifies
that the Code shall not affect any special or local law, or
any special jurisdiction or power conferred, or any special
procedure prescribed, unless there is a specific provision
to the contrary. Thus, the provisions of the Code would
11
Neutral Citation No. ( 2025:HHC:19372 )apply to the extent that there is no contrary provision in
the special act or any special provision excluding the
jurisdiction and applicability of the Code. [See paragraph
128 of the Directorate of Enforcement v. Deepak Mahajan,
(1995) 82 Comp Cas 103 (SC); (1994) 3 SCC 440; 1994 SCC
(Cri) 785; 1994 SCC OnLine SC 17.] In A.R. Antulay v. Ramdas
Sriniwas Nayak [(1984) 2 SCC 500; 1984 SCC (Cri) 277; 1984
SCC OnLine SC 44], a Constitution Bench of this court has
clarified this position while discussing the applicability of
the Code to offences under the Prevention of Corruption
Act, 1988. The relevant portion reads [ Page 517 in SCC] :
“16… In the absence of a specific provision made in
the statute indicating that offences will have to be
investigated, inquired into, tried and otherwise
dealt with according to that statute, the same will
have to be investigated, inquired into, tried and
otherwise dealt with according to the Code of
Criminal Procedure. In other words, the Code of
Criminal Procedure is the parent statute which
provides for investigation, inquiry into and trial of
cases by criminal courts of various designations.”
xxxxxx
50. To a large extent, our reasoning and the ratio on the
applicability of the Code to the Customs Act would equally
apply to the GST Acts in view of sections 4 and 5 of the
Code. Sub-section (10) to section 67 of the GST Acts
postulates that the provisions of the Code relating to
search and seizure shall, as far as may be, apply to search
and seizure under the GST Acts, subject to the
modification that for the purpose of sub-section (5) to
section 165 of the Code, the word “Magistrate” shall be
substituted with the word “Commissioner”.Section 69,
which deals with the power of arrest, a provision which
we will refer to subsequently, also deals with the
provisions of the Code when the person arrested for any
offence under the GST Acts is produced before a
Magistrate. It also deals with the power of the authorised
12
Neutral Citation No. ( 2025:HHC:19372 )
officers to release an arrested person on bail in case of a
non-cognizable and bailable offence, having the same
power and subject to the same provisions as applicable to
an officer in charge of a police station. We would,
therefore, agree with the contention that the GST Acts are
not a complete code when it comes to the provisions of
search and seizure, and arrest, for the provisions of the
Code would equally apply when they are not expressly or
impliedly excluded by provisions of the GST Acts.
14. Therefore, the submission that the provisions of
Cr.P.C. do not apply to GST Act and the Act is silent regarding the
procedure for investigation, inquiry, or trial is not correct.
15. It was submitted that the learned Trial Court erred in
ordering that the pre-charge evidence be led. This submission is
not acceptable. Section 132 provides for imprisonment, which
may extend to five years or a fine. Section 2(X) of the Cr.P.C.
defines a warrant case as a case relating to an offence punishable
with imprisonment for a term exceeding two years. Since
imprisonment provided is five years, which is more than two
years, therefore, the case was to be tried as a warrant case, and
there is no error in trying the case as a warrant case.
16. Chapter 19B of the Cr.P.C. deals with the trial of a
warrant case by a Magistrate instituted otherwise than on a
police report. Section 244 of the Cr.P.C. provides that when in a
13
Neutral Citation No. ( 2025:HHC:19372 )
warrant case instituted otherwise than on a police report, the
accused appears or is brought before a Magistrate, the
Magistrate shall proceed to hear the prosecution and take all
such evidence as may be produced in support of the prosecution.
Therefore, it is apparent that the Magistrate has to record the
evidence of the prosecution after the appearance of the accused
and the learned Trial Court was justified in ordering the
production of the evidence.
17. It was submitted that the investigation was not
properly conducted. The officials visited the addresses
mentioned in the invoices and did not contact the GST Officials
in Delhi to ascertain the proper names and addresses. This
submission will not help the petitioners. When the officials went
to the addresses mentioned in the invoices and found that no
such entity existed, it was sufficient to infer that the invoices
were fake, and the material shown to have been supplied as per
the invoices could not have been supplied since no such person
existed at the given address. The Court has to see a prima facie
case while exercising inherent power and does not sift the
evidence to determine its creditworthiness or value. This is for
the learned Trial Court to see where the matter is pending;
14
Neutral Citation No. ( 2025:HHC:19372 )
hence, the complaint cannot be quashed simply because the
investigation was not made with the GST authorities at Delhi.
18. In Mukesh Singh (supra), the Hon’ble Supreme Court
held that the investigation is not vitiated simply because the
informant is the investigator. The question of bias or prejudice
would depend upon the facts and circumstances of the case;
hence, the cited judgment does not show that the complaint is
liable to be quashed because the investigation was made by the
officials of the department.
19. No other point was urged.
20. In view of the above, the present petition fails and the
same is dismissed.
21. The observation made herein before shall remain
confined to the disposal of the petition and will have no bearing
whatsoever on the merits of the case.
(Rakesh Kainthla)
Judge
23rd June 2025
(Saurav Pathania)