Gagandeep Singh And Another vs. State Of Hp Another

Held

The Court held that the submission that the provisions of Cr.P.C. do not apply to the GST Act and that the Act is silent regarding the procedure for investigation, inquiry, or trial is incorrect. Citing Directorate of Enforcement v. Deepak Mahajan and A.R. Antulay, the Court clarified that the Cr.P.C. applies to special or local laws unless there is a specific provision to the contrary. Section 67(10) of the GST Acts explicitly states that Cr.P.C. provisions relating to search and seizure apply. Similarly, Section 69 deals with arrest and production before a Magistrate, implying the applicability of Cr.P.C. The Court found no error in the Trial Court ordering pre-charge evidence because Section 132 provides for imprisonment up to five years, making it a warrant case under Section 2(x) of Cr.P.C. Section 244 of Cr.P.C. mandates the Magistrate to hear the prosecution and take evidence in such cases. The argument regarding improper investigation was dismissed, stating that finding non-existent entities at the addresses was sufficient to infer fake invoices, and the Court does not sift evidence at this stage. The cited judgment in Mukesh Singh (supra) was deemed inapplicable as it did not vitiate investigation solely because the informant was the investigator.

Facts

The petitioners, Gagandeep Singh and another, partners of M/s G.M. PowerTech, filed a petition to quash a complaint filed under Section 69 read with Section 132 of the HPGST/CGST Act and Section 20 of the IGST Act. The complaint alleged large-scale tax evasion through fraudulent input tax credit (ITC) during 2017-18 and 2018-19. The petitioners allegedly declared inward supplies from non-existent Delhi and U.P.-based firms, using fake invoices and vehicles. Goods worth ₹2,89,26,299/- were claimed to be transported by fake vehicles, with an ITC of ₹61,69,147/- claimed. An inquiry under Section 70 of the Act was initiated, and summons to suppliers were returned as undelivered. Physical verification revealed the suppliers did not exist at the given addresses. The total fraudulent ITC claimed was ₹9,21,30,291/-. The Additional Chief Judicial Magistrate (ACJM), Kasauli, found sufficient reason to summon the accused.

Key Issues

1. Whether the provisions of the HPGST/CGST and IGST Acts are silent regarding arrest, investigation, and filing of complaints, rendering the powers of officers arbitrary and violative of Article 21 of the Constitution of India? 2. Whether the learned Trial Court erred in ordering pre-charge evidence to be led? Petitioner's arguments: The petitioners contended that the HPGST/CGST Act does not provide for investigation and filing of complaints, and the investigation by departmental officials materially prejudiced them, making the continuation of proceedings an abuse of process. They argued that the powers conferred upon authorities are unbridled and arbitrary, violating Article 21. They also argued that the learned Trial Court wrongly fixed the matter for pre-charge evidence. They relied on Mukesh Singh v. State (Narcotic Branch of Delhi). Respondent's arguments: The State argued that the provisions of the Code of Criminal Procedure (Cr.P.C.) apply to investigations and trials under the HPGST/CGST Act as per Section 4(2) read with Section 5 of Cr.P.C., negating the claim of unguided powers. They asserted that the judgment in Mukesh Singh (supra) was not applicable. They also stated that the petitioners were liable for arrest under Sections 69 and 132, and the search was conducted under Section 67. They further argued that the Trial Court was justified in ordering pre-charge evidence as the offence is a warrant case.