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HP HC Refuses to Quash FIR in Bogus GST Transactions and Cheating Case

Case Law Details

TaxGuru Citation
2026 taxguru.in 12770
Case Name
Vinod Kumar Vs State of H.P. & another (Himachal Pradesh High Court)
Date of Judgement/Order
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Vinod Kumar Vs State of H.P. & another (Himachal Pradesh High Court)

Summary: The Himachal Pradesh High Court dismissed Vinod Kumar’s petition under Section 528 of the Bharatiya Nagrik Suraksha Sanhita, 2023 seeking quashing of FIR No. 0059/2022 registered at Police Station Kala Amb, District Sirmaur under Sections 420, 406 and 120-B IPC, corresponding to Sections 318(4), 316(2) read with Section 61(2) BNS. The FIR arose from allegations concerning supply of MS scrap to M/s Amba Shakti Ispat Limited through firms said to be bogus or non-existent.

The complainant alleged that Vinod Kumar, proprietor of M/s GT Iron Store and an agent of the company, had entered into agreements for arranging MS scrap either himself or through other firms. Under the arrangement, he introduced M/s Mahesh Trading Company and M/s Rajshree Trading Company and furnished KYC documents, identity and address proofs, GST registration certificates, cancelled cheques, bank statements, purchase invoices, e-way bills and bilties to establish the genuineness of the suppliers. The transactions were reflected in GSTR-2A and GSTR-2B. The company paid ₹11,03,42,000 to Mahesh Trading Company and ₹10,44,00,000 to Rajshree Trading Company, while the petitioner received approximately ₹6,05,501 as commission.

The dispute surfaced after a GST Department search/raid on 20.07.2021, when the transactions and tax invoices were allegedly found to be bogus and illegal. The company claimed that it had to deposit approximately ₹1 crore towards ITC and faced a further ITC demand of ₹2.66 crore. The complainant also alleged that the petitioner failed to honour contractual indemnity obligations, retained his commission, issued a demand notice for ₹1,22,08,204 and initiated proceedings before the NCLT. The petitioner contended that the dispute was essentially civil and contractual, relying particularly on indemnity and remedies clauses in the agreements.

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Author Info

CA Sandeep Kanoi
Qualification: Graduate, CA in Job / Business, DD
Company: Taxguru Consultancy
Location: Mumbai, Maharashtra
Articles Published: 22,687

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