Vishal vs State Of Haryana And Others

CRM-M No.41128 of 2022 (O&M) Reserved on :04.09.2025 Pronounced on:31.10.2025. Vishal

......Petitioner Versus

State of Haryana and others ...... Respondents

CORAM: HON'BLE MR.JUSTICE SURYA PARTAP SINGH

Argued by:Mr. Pragyati, Advocate for Mr. Sandeep Goyal, Advocate for the petitioner.

Ms. Deepali Verma, AAG, Haryana.

SURYA PARTAP SINGH, J. (Oral):

In Police Station Gohana City, District Sonepat, the FIR No.475

dated 20.10.2020 has been lodged for the commission of offence punishable

under Section 11 of the Central Sales Tax Act, 1956 and under Sections 420,

467, 468 and 471 of IPC. In the above mentioned FIR the petitioner has been

arrayed as an accused. The petitioner is aggrieved of the above mentioned

prosecution, and therefore, he has approached this Court for quashing of

abovesaid FIR by invoking the jurisdiction vested in this Court by virtue of

Section 482 Cr.P.C.

2. In nut-shell, the facts emerging from record are that the above

mentioned FIR came into being in response to a written complaint submitted

by the Office of Excise and Taxation officer dated 13.02.2000. The allegations

contained in the above mentioned complaint were as under:-

"their office has received a communication that huge outward

supply has been made by 'M/s Bhagwati Traders', Khanpur turn, Gohana,

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Sonipat (06AILPV7596K12Z4) to Mandi Govindgarh. Punjab. That

preliminary inquiry was conducted by the said office and it was observed that

this firm is non-existent and non-functional and for name sake only a sign

board has been installed in front of premises located at Khanpur turn, Gohana,

Sonipat. That from the volume of transactions made by the tax payer, it seems

that only paper transaction has been made and this tax payer has made the

following purchases from the State/UT of Haryana, Punjab, Chandigarh,

Uttrakhand, Delhi, and made subsequent sale of Rs. 14,85,07,183/-to the State

of Punjab as mentioned in the letter received from Punjab Authorities.

The details of the transaction were given in the complaint itself,

which were as under:-

Firm name GSTN Place State Taxable IGST CGST SGST M/s amount

GKM 04BLHP UT Chandigarh 229229144 41261246 0 0 Enterprises A2654R1 Chandigar ZX h Industries 07AHFP Pitampura Delhi 20490724 3688330 0 0 K9402Q1 ZV Sehaj 07CTJPK Keshav Delhi 8314160 1496549 0 0 Trading Co. 9383A1Z Puram D Kabir Steel 07GWYP Rani Bagh Delhi 1359296 244673 0 0 Industries S4728B1 ZV Pardeep 07HF1PS New Delhi Delhi 6669033 1200426 0 0 Steel 5917A1Z A SK 07HUKP Rani Bagh Delhi 4368549 786339 0 0 Industries S8749R1 Pitum Pura Z2 RS Steel 06A9ZPA Panipat Haryana 8421664 0 757950 75795 Traders 4111P1Z 0 M Sai 06APUP Panipat Haryana 4608215 0 414739 41473 Enterprises D8844E1 9 ZL Sanjana 06ASBPH Panipat Haryana 263889 0 1235387 12358

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The complainant further had stated that this firm was assigned to

Central authorities, and therefore, letter had been written to central authorities

to block the ITC (Input Tax Credit). In addition to above, letters were also

written to the respective authorities in Haryana, Chandigarh. Uttrakhand,

Delhi, Rajasthan, from where purchases had been made by this dealer, and

they were requested to block the ITC at their end.

3. It is the case of the prosecution that on receipt of above

information, the FIR was registered under Sections 420/467/468/471 IPC and

Section 11 of Central Sales Tax Act and investigation was set into motion. It is

the case of the prosecution that once the above mentioned FIR was lodged, the

investigation had been taken up.

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4. Since the petitioner has been arrayed as an accused in the above

mentioned FIR he filed the present petition alleging:-

a) that the petitioner is registered under the Haryana Goods and

Services Tax Act, 2017/ Central GST Act, since 23.02.2018,

vide GSTIN 06AILPV7598K1Z4 to carry the business of

trading in Iron Scrap (waste pieces or disused articles of

wrought iron suitable for reworking).

b) that in normal course of its business, the Petitioner purchases

Iron Scrap from various states including Delhi, Haryana,

Dehradun and sells the same to the traders at Mandi

Gobindgarh, Punjab. The goods are transported through trucks.

The Petitioner is in possession of all the requisite documents in

respect of purchases as prescribed under the Act.

c) that the purchases made by the Petitioner are reflected in

Form of GSTR-2A which is available on the GST portal. In

respect of sales made by the Petitioner, the Petitioner is in

possession of proper invoices and E-way bills. That the details

of Sales made are uploaded on the GST website in form of

monthly returns filed in GSTR-3B. As per petitioner, he was

actively conducting its business in the relevant Financial Year

of 2018-19.

d) that as per GST Portal of the Petitioner, a letter dated

08.01.2021 was sent by the ETO-cum-Taxation Officer (State

Tax), Karnal to the ETO, Sonepat, Ward No. 10, Sonepat

directing to disallow the ITC of INR 13,91,984/- for the period

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of October 2018 to February 2019 received from 'M/s Balaji

Enterprises', GSTIN 06BQQPG7678P1ZQ.

e) that on 28.04.2021 a notice in Form GST DRC-01A under

Section 74(5) of CGST Act, 2017 was received by Sh. Vishal,

proprietor, 'M/s Bhagwati Traders', alleging paper transaction

without physical movement of goods in connivance with as

many as 10 firms. The Petitioner was advised to pay the amount

of tax, Interest and penalty amounting to INR 2,51,85,954/-

within 10 days of receipt of the notice or otherwise a show

cause notice under Section 74(1) was proposed to be issued to

the petitioner. However, no such show cause notice has been

issued to the petitioner, whatsoever.

f) That as per GST portal of the Petitioner, a Notice, dated

28.03.2022, in Form DRC-01 was issued under Section 74(5) of

CGST Act, 2017 to Sh. Vishal, proprietor 'M/s Bhagwati

Traders', whereby a total demand of Rs. 67,31,840.00/-,

Including tax, interest and penalty was raised for the Financial

Year 2018-19 alleging that the petitioner has shown purchases

from a non-existent firm, namely, 'M/s Shiv Om Sai Traders',

GSTIN 06GSJPS7578N1ZH.

g) that as per GST portal of the Petitioner, a notice, dated

29.03.2022, in Form DRC-01A was issued under Section 74(5)

of CGST Act, 2017 to Sh. Vishal, proprietor, 'M/s Bhagwati

Traders', whereby a total demand of Rs, 32,85,082.00/-,

including tax, interest and penalty was raised for the Financial

Year 2018-19 alleging that the petitioner has shown purchases

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from a non-existent firm, namely, 'M/s Balaji Enterprises',

GSTIN 06DBQQPG7678P1ZQ.

h) that on 01.09.2022, to the shock of the Petitioner, he was first

time apprised of the FIR No. 0475 of 2020 when police officials

visited his residential premises, i.e. 19, Bhatia Colony, Near

Ganesh Mandir, Panipat-132103 (Haryana) and enquired about

the said FIR.

i) That on 20.10.2020, FIR No. 0475 was registered in P.S.

Gohana City, Distt. Sonipat under Section 11, CST Act, 1956

read with Sections 420, 467, 468 and 471 of the IPC on the

directions of Excise and Taxation Officer, Sub Division,

Gohana Distt Sonipat against the Petitioner alleging that the

Petitioner is non-existent, non functional and has merely

Installed a board in front of the premises and is not carrying out

any business from its registered premises. That as per the FIR,

the memo to register FIR is dated 13.02.2019. Thus, there is an

unexplained delay of over 1 year and 8 months in registering

the FIR.

j) that in the FIR, it has been alleged that the Petitioner is a non-

existent, non-functional entity and for name sake only a sign

board has been installed in front of the premises of the

petitioner located at Khanpur Mode, Gohana, Sonipat. It is

alleged that the petitioner seems to be making only paper

transactions.

k) that the petitioner was first time apprised of the above-

mentioned FIR No. 0475 of 2020 when police officials visited

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the residential premises, i.e. H. No.19, Bhatia Colony, Near

Ganesh Mandir, Panipat-132103 (Haryana) of the petitioner and

made enquiries about the said FIR.

l) that the petitioner received summons under Section 41-A of

the Criminal Procedure Code to appear before Assistant Sub-

Inspector on 05.09.2022 in regard to the present FIR.

m) that the Central Board of Indirect Taxes and Customs

("CBIC") issued a circular no. 171/03/2022-GST, dated

06.07.2022 whereby it clarified various issues relating to

applicability of demand and penalty provisions under the CGST

Act, 2017 in respect of transactions involving issue of invoices

without actual supply of goods or services. The CBIC clarified

that actual action against a person will depend upon the specific

facts and circumstances of the case and tax/interest/ penalty has

to be imposed as per the definite role performed by the person

in the fraudulent transaction.

5. In support of above mentioned grounds the petitioner relied upon

following documents:-

Documents

Annexure P-1 A copy of the registration certificate of the Petitioner Annexure P-2 Copy of returns filed by the Petitioner for the Financial Year of 2018-19 under Form GSTR 3B Annexure P-3 Copy of the letter dated 08.01.2021 issued by ETO-cum-

Taxation Officer (State Tax), Karnal Annexure P-4 A copy of the notice dated 28.04.2021 Annexure P-5 A copy of the Intimation notice dated 28.03.2022 Annexure P-6 A copy of the intimation notice dated 29.03.2022 Annexure P-7 A copy of the FIR along with its true typed copy and its translated version

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Annexure P-8 Copy of the Summons dated 01.09.2022

6. Reply to the petition has been filed by the respondent wherein not

only the allegations contained in the petition have been specifically and

categorically denied, but also it has been reiterated that the proceedings have

been taken up in the right earnest and strictly in accordance with law. While

claiming that the firm of the petitioner is a non existing firm, doing no

business, it has been alleged by the respondents that fake documents have been

created by the petitioner to claim 'Inward Tax Credit' ('ITC' in short) by

defrauding the respondents.

7. Heard.

8. It has been argued by learned counsel for the petitioner that filing

of FIR for the commission of offence punishable under Section 11 of CST Act

and under Sections 420, 467, 468 and 471 of IPC, is purely an abuse of process

of law. As per learned counsel for the petitioner, since under the GST Act the

above mentioned Act has been defined as an offence under Section 132(1)(b),

any action under general law cannot be initiated. It has been further contended

by learned counsel for the petitioner that the FIR in question has been lodged

with mala fide intentions just for harass the petitioner, and that instead of

taking action as per provisions of GST Act, which a complete Code in itself,

the FIR under Sections 420, 467m 468 and 471 of IPC has been lodged. While

referring to the principles of law laid down by the Hon'ble Supreme Court of

India in the case of State of Haryana Vs. Bhajan Lal, 1992 SCC (Cri) 426,

the learned counsel for the petitioner has sought for quashing of present FIR.

9. In addition to above, the learned counsel for the petitioner has also

argued that the term "Complete Code" has been discussed by the Hon'ble

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Supreme Court in the case of Girnar Traders (3) Vs. State of Maharashtra

(2011), 3 SCC 1 wherein it has been observed that "Complete" further adds a

degree of certainty to the code. It has to be a compilation of provisions which

would comprehensively deal with various aspects of the purpose sought

legislations is either absent or at best is minimal. The provisions of the

enactment in question should provide for a complete machinery to deal with

various problems that may arise during its execution. Sufficient powers should

be vested in the authority/forum created under the Act to ensure effectual and

complete implementation of the Act. There should be complete and coherent

scheme of the statutory provisions for attainment of the object and purpose of

the Act. It essentially should also provide for adjudicatory scheme to deal with

grievances/claims of the persons affected by enforcement of the provisions of

the Act, preferably, including an appellate forum within the framework of the

Act. In other words, the Act in itself should be a panacea to all facets arising

from the implementation of the Act itself.

10. It has been further argued on behalf of the petitioner that CGST

Act 2017 which is a complete code, prescribes the procedure for prosecution,

and punishment upon conviction, with regard to the acts attributed to the

petitioner, and that it further prescribes the cancellation of registration under

GST Act, if the firm is found to be non-operating from its registered premises.

As per learned counsel for the petitioner since the contents of FIR reveals that

one of the allegation against the petitioner is that he is not operating from its

registered premises, the only action which can be taken against the petitioner is

the cancellation of registration of the firm of petitioner, and not the prosecution

under general provisions of law.

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11. The learned counsel for the petitioner has further argued that in

the present case the mandatory procedure enshrined under Section 74 of CGST

Act 2017, read with Rule 142 of CGST Rule 2017, has not been followed and

that the above mentioned provisions prescribed that if an officer arrives at a

conclusion that input tax credit (ITC) has been wrongly availed, he must

communicate the same to the alleged defaulter, give an opportunity to pay

tax/interest/penalty and if the alleged defaulter does not pay the same then

issue a show cause notice, and give an opportunity to file representation.

According to learned counsel for the petitioner the above mentioned

mandatory provisions have not been followed in the present case, and

therefore, for want of above mentioned compliances, the FIR at the instance of

Excise and Taxation Officer is not sustainable.

12. While referring to the clause 132(1)(b) of CGST Act read with

clause 132, the learned counsel for the petitioner has argued that the above

mentioned statute provides the procedure in case of evasion of tax on account

of invoice/bill without supply of goods, and therefore, instead of filing the FIR,

the above mentioned procedure should have been followed by the Excise and

Taxation Authority. In support of above mentioned arguments the learned

counsel for the petitioner has referred to the principles of law laid down by the

Hon'ble Supreme Court of India in the case of Jeewan Kumar Raut Vs. CBI,

(2009), 7 SCC 526, wherein it has been held that 'where a statute empowers an

authority to investigate a matter, cognizance of such offence must not be taken

under the Criminal Procedure Code'.

13. The learned counsel for the petitioner has also referred to the

principles of law laid down by this Court in the case of Ajay Kumar Sandhu

Vs. State of Haryana, 2015 SCC Online P&H 16972, wherein it has been

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held that "the Finance Act 1994", being a Special and Complete Code prevails

over general provisions of IPC, and accordingly, for alleged non-payment of

service tax, department cannot file an FIR under the provisions of IPC. While

referring to the principles of law laid down by the Hon'ble Supreme Court of

India in the case of Union of India Vs. Ashok Kumar Sharma and other,

2020 SCC Online SC 683, the learned counsel for the petitioner has further

contended that in the above mentioned case Hon'ble Apex Court while

upholding the Allahabad High Court judgment, whereby the FIR was quashed

with respect to an offence registered under Drugs and Cosmetics Act, 1940,

held that Police Officers cannot register FIR, arrest, prosecute or investigate in

regard to cognizable offence under Chapter IV of the Drugs and Cosmetics

Act, as the latter is a complete Code in itself.

14. The learned counsel for the petitioner has also contended that the

FIR in question has been lodged for the commission of offence punishable

under Sections 420, 467, 468 and 471 of IPC, and that one of the essential

ingredient of above mentioned offence is the fraudulent and dishonest intention

at the time of making promise or representation. According to learned counsel

for the petitioner in the present case there are no such allegations, and

therefore, in view of the law laid down by the Hon'ble Supreme Court in the

case of V.Y. Jose Vs. State of Gujarat (2009) 3 SCC 78, the above

mentioned FIR is not sustainable.

15. In support of his above arguments, the learned counsel for the

petitioner has referred to the principles of law laid down by the Hon'ble

Supreme Court of India in the case of Rekha Jain Vs. State of Karnataka,

2022 SCC Online SC 585, wherein it has been held that to make out a case

against a person for the offence under Section 420 IPC there must be a

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dishonest inducement to deceive a person to deliver any property to any other

person. According to learned counsel for the petitioner, in the present case,

there is no allegation at all against the accused - 'Bhagwati traders', of any

inducement by it to deceive and deliver the goods. As per learned counsel for

the petitioner, considering the allegations in the FIR/complaint as they are, and

in the absence of any allegation of dishonest inducement by 'M/s Bhagwati

Traders' through its proprietor Sh. Vishal, it cannot be said that the Petitioner

firm has committed any offence under Section 420 of IPC.

16. In view of above mentioned contention the learned counsel for the

petitioner has argued that the present case is a perfect case wherein the

principles of law laid down by the Hon'ble Supreme Court in the case State of

Haryana Vs. Bhajan Lal, 1992 SCC (Cri) 426, should be followed and while

holding that the filing of FIR against the petitioner is nothing but an abuse of

process of law, the above mentioned FIR should be quashed.

17. Per contra, it has been argued by learned State counsel that the

present case is not a case wherein at its own level the FIR has been lodged by

the police. According to learned State counsel, in fact, in the present case, it

was the Tax Authority, i.e. the Excise and Taxation Officer, who approached

the police and requested for filing of FIR in view of the fraudulent acts

committed by the petitioner. While defending the action taken by the Police

authority it has been argued by learned State counsel that once the complaint

has been moved by tax authority, the filing of FIR for a cognizable offence by

the police is in accordance with law, and there is no such bar that in such a

case the FIR cannot be lodged.

18. The learned State counsel while referring to the contents of

complaint has argued that it was reported by the tax authority that the

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petitioner was running a non-existent firm just for the purpose of creating

document to avail the facility of 'Input Tax Credit', and that, in fact, no

business was being run by the petitioner. According to learned State counsel

for drawing the benefit of 'Inward Tax Credit' the documents were forged and

fabricated by the petitioner and therefore, for the acts of creating false

documents, the petitioner can be prosecuted under the general provisions of

Indian Penal Code.

19. In the alternative the learned State counsel has argued that for the

sake of arguments even if it is accepted that the petitioner cannot be prosecuted

for the offence under Sections IPC, he can be prosecuted under GST Act, as

the abovementioned offence is cognizable and non-bailable. In this regard, the

learned State counsel has pointed out that the total tax liability as detailed in

the complaint comes out to be Rs.7,34,92,693/-. In view of above discussed

figures it has also been contended by learned State counsel that Section 132(1)

(b) read with Section 132(1)(i) makes it abundantly clear that the offence

allegedly committed by the petitioner is a cognizable offence, and therefore,

filing of FIR by the police at the instance of Taxation authority cannot be held

to be illegal.

20. The record has been perused carefully.

21. As far as the present petition is concerned, the facts and

circumstances of the present case, the grounds taken by the petitioner for

quashing of FIR and the reply submitted by the State, makes it abundantly

clear that the points which need determination in the present case is:-

Whether at this stage the FIR lodged against the petitioner

is liable to be quashed.

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As far as the above mentioned point of determination is

concerned there are two relevant aspects which are necessary to be

taken into consideration.

Firstly, whether on the basis of allegations contained in the

FIR any cognizable offence is made out, if yes, under what

provisions; and

secondly, whether it will serve the ends of justice if by

taking into consideration the plea raised by the petitioner, the FIR is

quashed at this stage.

22. As far as the first component is concerned the contents of the FIR

shows that the allegations against the petitioner are that he sought GST number

but without doing any business he has been issuing invoices, and thereby

claiming the benefit of 'Input Tax Credit'.

23. Withe regard to the above mentioned allegations Section 132(1)

(b) of the Central Goods and Service Tax Act 2017 is relevant. It provides that

issuing any invoice or bill without supply of goods or service or both in

violation of the provisions of this Act, or the rules made thereunder leading to

wrongful availment or utilisation of 'Input Tax Credit' or refund of tax is an

offence.

Sections 132(1)(i) further provides that whosoever commits, or

causes to commit and retain the benefit arising out of above mentioned offence

shall be punished with imprisonment for a term which may extend to 5 years

and with fine, if the tax evaded or the amount of 'Input Tax Credit' wrongly

availed or utilized or the amount of refund wrongly taken, exceeds

Rs.5,00,00,000/-.

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It is also relevant to mention here that Section 132(5) provides

that the offence defined under Section 132(1)(b) and punishable under Sections

32(1)(i) shall be cognizable and non-bailable.

24. In the light to above mentioned special statute now it has to be

determined as to whether in view of allegations levelled by the complainant

against petitioner-accused, the offence under Section 132(1)(b) is made out

against the petitioner or the offence under Section 420, 467, 468 and 471 IPC.

25. With regard to above, the thin line which can be a defining factor

is the manner in which the GST number was obtained by the petitioner, and

also act and conduct of the petitioner while performing the business. If the

GST number has been obtained with the help of forged documents or with an

intention to commit cheating with the department, and right from the very

beginning not even a single valid transaction with regard to trade/business was

performed by the petitioner, then definitely there is a very strong chance that

the above mentioned act and conduct of the petitioner may fall within the

ambit of cheating/forgery, defined under Indian Penal Code. On the other

hand if the petitioner has been doing business in usual course and during the

course of business there were certain transactions which had not actually taken

place, then the petitioner may be treated to be a bona fide trader who with

regard to certain limited transactions committed the offence under Section

132(1)(b) of the GST.

26. In order to determine above mentioned distinction the proper

course available to the petitioner is to approach the learned trial Court and

raised the plea taken by him at the time of defending himself. Since the learned

trial Court is having an opportunity to look into the contents of final report

submitted by the police along with evidence collected during the course of

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investigation, and also the evidence led during trial, only trial Court will be in

a position to take a decision as to whether the offence allegedly committed by

the petitioner comes within the purview of Section 420, 467, 468 and 471 of

IPC or under Section 132(1)(b) of GST.

27. If the offence allegedly committed by the petitioner comes within

the purview of Section 32(1)(b) of GST Act the principles of law laid down by

the Hon'ble Supreme Court of India in the case of Ashok Kumar Shamra

(supra) are also applicable wherein the Hon'ble Supreme Court upheld the

verdict of Allahabad High Court whereby the FIR registered by the Police

under the provisions of Drug and Cosmetic Act was quashed.

28. With regard to facts and circumstances of the present case one of

the most relevant and important aspect to be taken into consideration is that in

the present case the investigation already stands completed, and the final report

under Section 173 Cr.P.C. (challan) has already been filed before the learned

trial Court. In view of above mentioned report the learned trial Court has not

only taken cognizance against the petitioner, but also the charge has been

framed against the petitioner. The case is now fixed for prosecution evidence

before the learned trial Court. There is nothing on record to show that at the

time of framing of charge the petitioner raised any objections commensurate to

the grounds taken in the present petition, and thus, the order with regard to

framing of charge, which has not been challenged, has become final.

29. As far as the quashing of FIR is concerned the scope for quashing

of FIR is limited as in the quashing petition this court does not have the

advantage of looking into the evidence collected by the Investigating Agency.

30. In this regard the Hon'ble Supreme Court of India in the case of

Neeharika Infrastructure Pvt. Ltd. Vs. State of Maharashtra and others,

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rendered in Criminal Appeal No.330 of 2021, has prescribed the guidelines

wherein the FIR can be quashed. Those guidelines are as under:

"i) Police has the statutory right and duty under the relevant

provisions of the Code of Criminal Procedure contained in

Chapter XIV of the Code to investigate into a cognizable

offence;

ii) Courts would not thwart any investigation into the cognizable

offences;

iii) It is only in cases where no cognizable offence or offence of any

kind is disclosed in the first information report that the Court

will not permit an investigation to go on;

iv) The power of quashing should be exercised sparingly with

circumspection, as it has been observed, in the 'rarest of rare

cases (not to be confused with the formation in the context of

death penalty).

v) While examining an FIR/complaint, quashing of which is

sought, the court cannot embark upon an enquiry as to the

reliability or genuineness or otherwise of the allegations made

in the FIR/complaint;

vi) Criminal proceedings ought not to be scuttled at the initial

stage;

vii) Quashing of a complaint/FIR should be an exception rather than

an ordinary rule;

viii) Ordinarily, the courts are barred from usurping the jurisdiction

of the police, since the two organs of the State operate in two

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specific spheres of activities and one ought not to tread over the

other sphere;

ix) The functions of the judiciary and the police are

complementary, not overlapping;

x) Save in exceptional cases where non-interference would result

in miscarriage of justice, the Court and the judicial process

should not interfere at the stage of investigation of offences;

xi) Extraordinary and inherent powers of the Court do not confer an

arbitrary jurisdiction on the Court to act according to its whims

or caprice;

xii) The first information report is not an encyclopedia which must

disclose all facts and details relating to the offence reported.

Therefore, when the investigation by the police is in progress,

the court should not go into the merits of the allegations in the

FIR. Police must be permitted to complete the investigation. It

would be premature to pronounce the conclusion based on hazy

facts that the complaint/FIR does not deserve to be investigated

or that it amounts to abuse of process of law. After

investigation, if the investigating officer finds that there is no

substance in the application made by the complainant, the

investigating officer may file an appropriate report/summary

before the learned Magistrate which may be considered by the

learned Magistrate in accordance with the known procedure;

xiii) The power under Section 482 Cr.P.C. is very wide, but

conferment of wide power requires the court to be more

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cautious. It casts an onerous and more diligent duty on the

court;

xiv) However, at the same time, the court, if it thinks fit, regard

being had to the parameters of quashing and the self-restraint

imposed by law, more particularly the parameters laid down by

this Court in the cases of R.P. Kapur (supra) and Bhajan Lal

(supra), has the jurisdiction to quash the FIR/complaint;

xv) When a prayer for quashing the FIR is made by the alleged

accused and the court when it exercises the power under

Section 482 Cr.P.C., only has to consider whether the

allegations in the FIR disclose commission of a cognizable

offence or not. The court is not required to consider on merits

whether or not the merits of the allegations make out a

cognizable offence and the court has to permit the investigating

agency/police to investigate the allegations in the FIR;

xvi) The aforesaid parameters would be applicable and/or the

aforesaid aspects are required to be considered by the High

Court while passing an interim order in a quashing petition in

exercise of powers under Section 482 Cr.P.C. and/or under

Article 226 of the Constitution of India. However, an interim

order of stay of investigation during the pendency of the

quashing petition can be passed with circumspection. Such an

interim order should not require to be passed routinely, casually

and/or mechanically. Normally, when the investigation is in

progress and the facts are hazy and the entire evidence/material

is not before the High Court, the High Court should restrain

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itself from passing the interim order of not to arrest or "no

coercive steps to be adopted" and the accused should be

relegated to apply for anticipatory bail under Section 438

Cr.P.C. before the competent court. The High Court shall not

and as such is not justified in passing the order of not to arrest

and/or "no coercive steps" either during the investigation or till

the investigation is completed and/or till the final

report/chargesheet is filed under Section 173 Cr.P.C., while

dismissing/disposing of the quashing petition under Section 482

Cr.P.C. and/or under Article 226 of the Constitution of India;

xvii) Even in a case where the High Court is prima facie of the

opinion that an exceptional case is made out for grant of interim

stay of further investigation, after considering the broad

parameters while exercising the powers under Section 482

Cr.P.C. and/or under Article 226 of the Constitution of India

referred to hereinabove, the High Court has to give brief

reasons why such an interim order is warranted and/or is

required to be passed so that it can demonstrate the application

of mind by the Court and the higher forum can consider what

was weighed with the High Court while passing such an interim

order.

xviii)Whenever an interim order is passed by the High Court of "no

coercive steps to be adopted" within the aforesaid parameters,

the High Court must clarify what does it mean by "no coercive

steps to be adopted" as the term "no coercive steps to be

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adopted" can be said to be too vague and/or broad which can be

misunderstood and/or misapplied."

31. Similarly in the case of Sadiq B. Hanchinmani Vs. State of

Karnataka, Criminal Appeal No.4728 of 2025, the Hon'ble Supreme Court

of India has ruled that police investigation should be allowed to proceed unless

exceptional circumstances warrant intervention. According to Hon'ble

Supreme Court of India the High Court should not interfere with the

investigation when allegations in FIR disclose cognizable offences.

32. In the case of M/s Balaji Traders Vs. The State of U.P. & Anr.

2025(3) RCR (Criminal) 175, the Hon'ble Supreme Court of India has ruled

that jurisdiction of quashing of FIR should be exercised sparingly in the 'rarest

of rare cases'. As per Hon'ble Supreme Court of India allegations in FIR or

complaint must be taken at face value and accepted int heir entirety to assess

whether they disclose a cognizable offence.

33. In the case of Muskan Vs. Ishaan Khan (Sataniya) Criminal

Appeal No.4752 of 2025, the Hon'ble Supreme Court of India held that the

Court should not conduct a mini-trial at the stage of quashing and that

quashing of FIR should be an exception and exercised sparingly in rarest of

rare cases. The Hon'ble Supreme Court of India has further held that Courts

cannot embark upon an enquiry as to the reliability or genuineness of

allegations made in the FIR/complaint.

34. If the facts and circumstances of present case are analysed in the

light of above mentioned guiding principles, it leads to the conclusion that, at

this stage, when it is not possible to decipher as to whether the allegations

against the petitioner comes within purview of Sections 420, 467, 468 and 174

IPC or Section 132 of GST any firm opinion cannot be rendered, as to whether

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the plea taken by the petitioner that FIR cannot be filed, and the same deserves

to be quashed, is devoid of merit. Hence, finding no merit in this petition at

this stage, the same is hereby dismissed. However, the petitioner shall be at

liberty to take all the pleas which have been taken in this quashing petition

before the learned trial Court at appropriate stage.

(SURYA PARTAP SINGH) JUDGE Pronounced on:31.10.2025 Manoj Bhutani

Whether speaking/reasoned Yes/No Whether reportable Yes/No

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