2025-VIL-627-HP
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SGST High Court Cases

GST - Quashing of criminal complaint, Applicability of Criminal Procedure Code (CrPC) to CGST Act, 2017 - Petitioners filed a petition for quashing of a complaint filed against them under Sections 69 and 132 of the HPGST/CGST Act, 2017 - The complaint was filed by the complainant alleging that the petitioners, who are partners of M/s G.M. PowerTech, availed fraudulent input tax credit by declaring inward supplies from fictitious and non-existent firms and using fake invoices and vehicles for transporting the goods - Whether the provisions of the CrPC apply to the proceedings under the CGST Act – HELD - The Supreme Court in Radhika Agarwal v. Union of India has held that the provisions of the CrPC apply to the proceedings under the GST Act to the extent that there is no contrary provision in the GST Act. The GST Act is not a complete code when it comes to the provisions of search, seizure, and arrest, and the provisions of the CrPC would equally apply unless expressly or impliedly excluded by the GST Act. Therefore, the submission that the CrPC does not apply to the GST Act is not correct - the provisions of the CrPC apply to the proceedings under the GST Act, and the investigation and filing of the complaint by the officials of the Department do not make the complaint liable to be quashed at this stage - the petition fails and the same is dismissed - Whether the investigation and filing of the complaint by the officials of the Department materially prejudiced the petitioners, and the continuation of the proceedings amounts to an abuse of the process of law – HELD - The fact that the investigation was conducted by the officials of the Department does not, by itself, vitiate the investigation or make it an abuse of process. The Supreme Court in Mukesh Singh v. State (Narcotic Branch of Delhi) has held that the question of bias or prejudice would depend on the facts and circumstances of the case. In the present case, when the officials visited 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 could not have been supplied. The Court need not sift the evidence to determine its creditworthiness or value at the stage of quashing, as this is for the trial court to consider. Therefore, the mere fact that the investigation was conducted by the officials of the department does not make the complaint liable to be quashed.
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