The Himachal Pradesh High Court has refused to quash a criminal complaint involving a large-scale fake input tax credit (ITC) scam under the Goods and Services Tax (GST) regime, involving fraudulent claims amounting to ₹15.86 crore.
The bench of Justice Rakesh Kainthla dismissed the petition, holding that the criminal complaint was valid and the proceedings before the trial court could continue.
The bench clarified that the Code of Criminal Procedure (CrPC) applies to GST offences where no special procedure is prescribed, and upheld the legality of the departmental investigation.
The petitioner, G.M. PowerTech, a partnership firm accused of availing ITC on the basis of bogus invoices issued by non-existent firms located in Delhi and Uttar Pradesh. Goods worth nearly Rs. 2.9 crore were allegedly shown to have been transported using implausible means such as two-wheelers and cars, raising serious concerns of tax evasion.
The petitioners, who are partners in the firm, had sought to quash the complaint filed under Sections 69 and 132 of the HPGST/CGST Acts, arguing that the provisions related to investigation and prosecution were vague, arbitrary, and violated constitutional protections under Article 21. 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.
The department argiued that 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 Rs. 15,86,49,362/- by conducting their business in violation of the CGST and HPGST 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.
Citing Supreme Court judgments, the Court underscored that quashing of criminal proceedings is permissible only in rare situations, such as clear abuse of legal process or absence of a prima facie case—conditions that were not met in this instance.
The order paves the way for trial proceedings to resume before the Additional Chief Judicial Magistrate (ACJM), Kasauli, where the matter is currently listed for pre-charge evidence.
Case Details
Case Title: Gagandeep Singh Versus State of H.P. and another.
Case No.: Cr. MMO No. 338 of 2024
Date: 23rd June, 2025
Counsel For Petitioner: Dinesh Singh Rawat and Anil Chauhan
Counsel For Respondent: Prashant Sen, Deputy Advocate General
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