The High Court · 2025

Petition under Section 528 of BNSS praying that in the circumstances stated in the Memorandum of Grounds of Criminal petition,the High Court may be pleased to Stay of all further proceedings C.C.No.g4l2024 in OR.No.2612022, ADJN, (Medchal) (cST) under section '1 32 (i) of CGST Act 2017 , on the file of the Special Judge for Economic offences City Criminal Courts Nampally at Hyderabad, including the appearance of the Petitioner/Accused No.2 and pass This Petition coming on for hearing, upon perusing the Memorandum of Grounds of Criminal Petition and upon hearing the arguments of Sri D y L N CHARYULU, Advocate for the Petitioner and Sri Arun Kumar Dodla, the Additional Public Prosecutor o+r behalf of the Respondent No.1 and sri Adiya Vyas for the Respondent No.2. The Court made the following: ORDER THE HONOURABLE SMT. JUSTICE K. SUJANA CRIMINAL PETITIOIT No.S4S3 of 2O2S ORDER: This Criminal petition is hled seeking the Court to quash the proceedings against the petitioner in C.C.No.94 of 2024 tn O.R.No.26 of 2022 on the file of the learned Special Judge for Economic Offences, City Criminal Courts, Nampally, Hyderabad, registered lor the offences punishable under Section 132(61 of rhe CGST Act, 2017. 2, The brief facts of the case are that the case involves a large-scale fraudulent scheme under the Central Goods and Services Tax (CGST) AcL, 2OlT, uncovered by the Medchal GST Commissionerate. The principal accused, Shri Okha Ram, proprietor of M/s. Shakti Steel India, in coliusion with others including Shri Vikas Saraf (accountant/auditor), and individuals like Shri Arjun Chou.dhary and Shri Kiran Chowdhary, orchestrated the creation of multiple bogus firms. These firms issued {ake invoices without actual supply of goods to avail and pass on lraudulent Input Tax Credit (ITC) amounting to several crores of rupees. The investigation 2 SKS,J Crl.P.No.3453 of 2025 revealedthatGsTregistrationswereobtainedusingidentiE' proofs and bank details of unwitting or minor participants in exchange for monthly payments' These lakc Ftrms' such as M/ s. Mithra Enterprises, M/ s Vinayaka En terprises' M/ s' Famous Enterprises, among others, were operated by the conspirators to create circular transactions and falsely claim ITC. Invoices were generated by Shri Vikas Saraf' u'ho also managed return filings and coordinated lhe fraudulent network. Some recipients' of fake ITC have admitted their involvement and repaid' part of the amount'

3. Heard Sri DYLN Charyulu, learned counsei appearing on behalf of the petitioner as well as Sri D Arun Kumar' learned Additional Public Prosecutor appearing on behalf of respondent No.1-State and Sri Aditya Vyas, learned counsel representing Sri Dominic Fernandes. learned Senior Standing Counsel for CBIC appearing on behalf of respondent No-2' Learned counsel for the petitioner submitted that the 4. allegations made by respondent No 2 against the petitioner/ accused No.2 are baseless and not supported by evidence. It is alleged that the petitioner, as a consultant to 3 SKS,J Crl.P.No.3453 of 2025 accused No. 1 (M/s. Shakti Steel India, represented by its proprietor Okha Ram), was responsible for generating fake invoices to evade GST between July 2OI7 and March 2022. However, the investigation appears to be a mere table investigation conducted in haste, relying on statements allegedly obtained under pressure from accused No. 1 and other individuals, who were coerced lo name lhe petltloner. He further submitted that in the statement recorded from accused No.1 on 14.12.2020 under Section 70 of the CGST Act, accused No. t himself stated that he was not well-versed in accounts or computer operations and that he used to send handwritten invoice copies to the petitioner for digitization and GST hling. This clearly indicates that the petitioner merely acted upon instructions and documents provided by accused No.1 in his capacity as a consultant, and there is no evidence to show that the petilioner fabricated any invoices on his own.

5. Learned counsel for the petitioner contended that statements of other individuals have no evidentiary value when accused No. t has himself admitted to preparing the invoices and handing them over to the petitioner and that the 'l 4 SKS,J Crl-P.No.3453 of 2O25 firm of accused No.1, M/s. Shakti Steel India, has bcen in existence since 2008 under VAT registration and was later migrated to the GST regime in the year 20 17, based on phl,sical inspection and verihcation by departmental officers. Therefore, the allegation that the petitioner created or was rcsponsible for forming a fake firm is patently false. The petitioner, being a registered tax consultant, was engaged professionally by accused No.1 for a fee, and no evidcnce has been brought on record'to show any conspiracy or financial gain on his part.

6. Learned counsel for the petitioner also submitted that wlrile the complaint was lodged in 2O2l (Case No. HQ POR/ I l2O2I), the petitioner was taken into custody and later released on bail on 25.02.2021. Since tris release, he has had no contacl with accused No.1, and hence the extension of liability against him even for ac[ions allegedly occurring in the year 2022 is unjust and legally unsustainable. The entire investigation appears to be directed more tou'ard meeting statistical targets than uncovering actual wrongdoing, with procedural lapses such as issuing blanket strmmons without spccifying whether the petitioner was being summoned as an , / 5 sI(s,J Crt-P.No-3453 of 2025 accused, witness, or co-accused, in violation of CBIC guidelines (lnstruction 3 I 2022 -23l,

7. Learned counsel further submitted that alongside the criminal proceedings, the department proceeded u,ith adjudication and passed Order No.ll7 of 2024 ADJN (GST) dated 27 .O9 .2024, imposing a penalty of Rs. 1 ,00,OOO (Rs.5O,O00 IGST, Rs.25,OO0 CGST, Rs.25,00O SGST) on the petitioner for aiding accused No. 1 in fraudulently availing ITC. It is contended that the adjudication authority acted mechanically, merely relying on statements from the criminal investigation without independent assessment. The petitioner has challenged the said adjudication order before the appellate authority, and the appeal is currently pending consideration. Therefore, he prayed the Court to quash the proceedings against the petitioner by allowing this criminal petition.

8. On the other hand, learned counsel for the respondent submitted that the petitioner has been identified as the principal mastermind behind a wide network of fictitious GST- registered hrms engaged in the generation and circulation of 6 SKS,J Crt.P.No.3453 of 2O25 fake invoices with the intent to fraudulently avail Input Tax Credit (lTC) to the tune of approximately Rs'67 76 crores, w'ithout any actual movement of goods or services The pctitioner is not merely implicated in the present case, but is also an accused in several other criminal complaints (CC Nos.81/2O24 lo 97 12024, excluding a few), which are all presenlly under trial before the Special Judge for Economic Offences, Nampally, Hyderabad. These complaints have becn filed with supporting material and evidence gathered during extcnsive investigation. The present petition, therefore, cannot be examrned in isolation from the petitioner's broader involvement in multiple such offences' Ile further submitted that in his voluntary statement 9. dated 1 I .\2.2O2O , the petitioner admitted to controlling lhe entire operation, including GST hlings, handling credentials, and managing records, for the bogus f,rrms He also confessed to having created these hrms with the sole intent to generate and pass on fake ITC in exchange for commission and that the petitioner has not retracted this statement' The claim made by lhe petitioner that witnesses were coerced ir-rto namrng him is untenable, particularly since the trial is ongoing and I { 7 sKs,J CrI.P-No.3453 of 2()25 witnesses are yet to be examined and cross-examined. Such claims can be appropriately adjudicated by the trial Court. Moreover, Shri Okha Ram, proprietor of M/s. Shakti Steel India, who has only studied up to the 8th standard, could not have devised such a complex GST scam u,ithout expert assistance. His own statements indicate that the petitioner handled all technical and financial aspects of the GST filings and transactions of his lirm, establishing the petitioner's active role in the fraud. 1O. Learned counsel for the respondents contended that the petitioner's contention regarding the adjudication proceedings is misconceived. Both the criminal and adjudication processes were independently initiated by the GST department, and the adjudication proceedings were conducted in accordance with the principles of natural justicc. 'l'he petitioner was given an opportunity to present his c:rse, submit documents, and attend a personal hearing, and the quasi-judicial order was passed based on the material on record. If aggrieved, the petitioner has a remedy of appeal, which he has already availed. Therefore, the findings of the adjudicating authority cannot be brushed aside as being '1 SKS'J Crl.P.No.3453 of 2025 sole ly based Thcrcfore, hc on statements recorded during investigatton' prayed the Court to dismiss the criminal petition. tn light of the submissions made by both the learned I I. counsel and upon perusal of the material available on record' this Court finds that the first contention of the petitioner is thathewasmerelyfunctioningasaconsultant'actingunder the instructions of the proprietors of various hrms' including accused No.1' It is submitted that he simply uploaded the invoices provided by the said proprietors ln support of this' reliance is placed on the statement of accused No' 1' who state<l that he had handed over physical copies of invoices to th, pctitioner lor uPloading'

12. However, a reading of various statements on record' particularly those made by individuals associated with other firms, rcveals that the petitioner was not just a passive consultant but actively managed GST hlings and invoice generation for several entities' including M / s' Mithra Enterprises. Even the proprietor of M/ s' Mithra Enterprises has stated that no actual goods were involved and that the I / 9 SKS,J Crl.P.No.3453 of 2O25 invoices were bogus. Therefore, at this stage, it cannot be said that the petitioner is not linked to the fraudulent filing of invoices, and the matter requires adjudication.

13. The second contention raised by the petitioner is that the summons issued by Respondent No.2 did not clarify whether he was being summoned as an accused or a witncss, thereby violating Instruction No.3 /2022-23. However, it is noted that the summons in question were issued in the ycar 2020, while the cited instruction came into effect much latcr. Hence, the instruction cannot operate retrospectively, and there is no merit in this contention.

14. The third contention is that the department has alreacly adjudicated the matter and imposed a penalqz of {1,0O,OOO/ on the petitioner, and such adjudication based solcly on sta[ements recorded by the investigating officer and he already filed appeal against the said hnding, whereas, the said departmental finding is in force as on today. Therefore, it is not a ground to quash the proceedings agains[ the petitioner and this is an issue to be determined during trial, particularly in light of the multiple statements implicating the petitioner'. SI{S,J Crl.P.No.3453 of 2O25 ,1

15. It is well established that the High Court, while exercising jurisdiction under Section 482 Cr.P.C., does not function as an appellate or revisional Court. The inherent powers undcr Sec[ion 482 are to be used sparingly and with caution. The present case involves incomplete and contested facts, and the evidence is yet to be tully collected and presented before the trial Court. Where both factual and legal issues are of signihcant compiexity and magnitude, and where a complete picture cannot be formed without fuli material and examination, the High Court should not prematurely interfere. Therefore, this petition is not iiable to be entertained at this stage and the same is liable to be dismissed. 7e,. Accordingly, this criminal petition is dismissed Miscellancous applications, if any pending, shall also stand close d. Sd/- B. CHANDRA PRAKASH ASSISTANT REGISTRAR //TRUE COPY// To, SECTION OFFICER Hyderabad 1 The Special Judge for Economic offences City Criminal Courts Nampally at 2. The Superintendent of Central Tax Anti Evasion Unit, Medchal, GST ^ Commissionerate, Medchal, Lakdikapul, fVJ.irUrO 3. Two CCs to the pUBLtC. pROSFgUioR, frigl C"r.t at Hyderabad. (OUT) 4. One CC to SRI D y L N CHARYULU nUroE"t" tOpUCt 5. Two CD Copies V ae. HIGH COURT DATED: 1110612025 I !a t) 1Fo 6 i- ,i(ri irI ;'ij AIJE 2ffi ,'. ORDER CRLP.No.3453 of 2025 CRIMINAL PETITION IS DISMISSED 1

Petition under Section 528 of BNSS praying that in the circumstances stated in the Memorandum of Grounds of Criminal petition,the High Court may be pleased to Stay of all further proceedings C.C.No.g4l2024 in OR.No.2612022, ADJN, (Medchal) (cST) under section '1 32 (i) of CGST Act 2017 , on the file of the Special Judge for Economic offences City Criminal Courts Nampally at Hyderabad, including the appearance of the Petitioner/Accused No.2 and pass This Petition coming on for hearing, upon perusing the Memorandum of Grounds of Criminal Petition and upon hearing the arguments of Sri D y L N CHARYULU, Advocate for the Petitioner and Sri Arun Kumar Dodla, the Additional Public Prosecutor o+r behalf of the Respondent No.1 and sri Adiya Vyas for the Respondent No.2. The Court made the following: ORDER THE HONOURABLE SMT. JUSTICE K. SUJANA CRIMINAL PETITIOIT No.S4S3 of 2O2S ORDER: This Criminal petition is hled seeking the Court to quash the proceedings against the petitioner in C.C.No.94 of 2024 tn O.R.No.26 of 2022 on the file of the learned Special Judge for Economic Offences, City Criminal Courts, Nampally, Hyderabad, registered lor the offences punishable under Section 132(61 of rhe CGST Act, 2017. 2, The brief facts of the case are that the case involves a large-scale fraudulent scheme under the Central Goods and Services Tax (CGST) AcL, 2OlT, uncovered by the Medchal GST Commissionerate. The principal accused, Shri Okha Ram, proprietor of M/s. Shakti Steel India, in coliusion with others including Shri Vikas Saraf (accountant/auditor), and individuals like Shri Arjun Chou.dhary and Shri Kiran Chowdhary, orchestrated the creation of multiple bogus firms. These firms issued {ake invoices without actual supply of goods to avail and pass on lraudulent Input Tax Credit (ITC) amounting to several crores of rupees. The investigation 2 SKS,J Crl.P.No.3453 of 2025 revealedthatGsTregistrationswereobtainedusingidentiE' proofs and bank details of unwitting or minor participants in exchange for monthly payments' These lakc Ftrms' such as M/ s. Mithra Enterprises, M/ s Vinayaka En terprises' M/ s' Famous Enterprises, among others, were operated by the conspirators to create circular transactions and falsely claim ITC. Invoices were generated by Shri Vikas Saraf' u'ho also managed return filings and coordinated lhe fraudulent network. Some recipients' of fake ITC have admitted their involvement and repaid' part of the amount'

3. Heard Sri DYLN Charyulu, learned counsei appearing on behalf of the petitioner as well as Sri D Arun Kumar' learned Additional Public Prosecutor appearing on behalf of respondent No.1-State and Sri Aditya Vyas, learned counsel representing Sri Dominic Fernandes. learned Senior Standing Counsel for CBIC appearing on behalf of respondent No-2' Learned counsel for the petitioner submitted that the 4. allegations made by respondent No 2 against the petitioner/ accused No.2 are baseless and not supported by evidence. It is alleged that the petitioner, as a consultant to 3 SKS,J Crl.P.No.3453 of 2025 accused No. 1 (M/s. Shakti Steel India, represented by its proprietor Okha Ram), was responsible for generating fake invoices to evade GST between July 2OI7 and March 2022. However, the investigation appears to be a mere table investigation conducted in haste, relying on statements allegedly obtained under pressure from accused No. 1 and other individuals, who were coerced lo name lhe petltloner. He further submitted that in the statement recorded from accused No.1 on 14.12.2020 under Section 70 of the CGST Act, accused No. t himself stated that he was not well-versed in accounts or computer operations and that he used to send handwritten invoice copies to the petitioner for digitization and GST hling. This clearly indicates that the petitioner merely acted upon instructions and documents provided by accused No.1 in his capacity as a consultant, and there is no evidence to show that the petilioner fabricated any invoices on his own.

5. Learned counsel for the petitioner contended that statements of other individuals have no evidentiary value when accused No. t has himself admitted to preparing the invoices and handing them over to the petitioner and that the 'l 4 SKS,J Crl-P.No.3453 of 2O25 firm of accused No.1, M/s. Shakti Steel India, has bcen in existence since 2008 under VAT registration and was later migrated to the GST regime in the year 20 17, based on phl,sical inspection and verihcation by departmental officers. Therefore, the allegation that the petitioner created or was rcsponsible for forming a fake firm is patently false. The petitioner, being a registered tax consultant, was engaged professionally by accused No.1 for a fee, and no evidcnce has been brought on record'to show any conspiracy or financial gain on his part.

6. Learned counsel for the petitioner also submitted that wlrile the complaint was lodged in 2O2l (Case No. HQ POR/ I l2O2I), the petitioner was taken into custody and later released on bail on 25.02.2021. Since tris release, he has had no contacl with accused No.1, and hence the extension of liability against him even for ac[ions allegedly occurring in the year 2022 is unjust and legally unsustainable. The entire investigation appears to be directed more tou'ard meeting statistical targets than uncovering actual wrongdoing, with procedural lapses such as issuing blanket strmmons without spccifying whether the petitioner was being summoned as an , / 5 sI(s,J Crt-P.No-3453 of 2025 accused, witness, or co-accused, in violation of CBIC guidelines (lnstruction 3 I 2022 -23l,

7. Learned counsel further submitted that alongside the criminal proceedings, the department proceeded u,ith adjudication and passed Order No.ll7 of 2024 ADJN (GST) dated 27 .O9 .2024, imposing a penalty of Rs. 1 ,00,OOO (Rs.5O,O00 IGST, Rs.25,OO0 CGST, Rs.25,00O SGST) on the petitioner for aiding accused No. 1 in fraudulently availing ITC. It is contended that the adjudication authority acted mechanically, merely relying on statements from the criminal investigation without independent assessment. The petitioner has challenged the said adjudication order before the appellate authority, and the appeal is currently pending consideration. Therefore, he prayed the Court to quash the proceedings against the petitioner by allowing this criminal petition.

8. On the other hand, learned counsel for the respondent submitted that the petitioner has been identified as the principal mastermind behind a wide network of fictitious GST- registered hrms engaged in the generation and circulation of 6 SKS,J Crt.P.No.3453 of 2O25 fake invoices with the intent to fraudulently avail Input Tax Credit (lTC) to the tune of approximately Rs'67 76 crores, w'ithout any actual movement of goods or services The pctitioner is not merely implicated in the present case, but is also an accused in several other criminal complaints (CC Nos.81/2O24 lo 97 12024, excluding a few), which are all presenlly under trial before the Special Judge for Economic Offences, Nampally, Hyderabad. These complaints have becn filed with supporting material and evidence gathered during extcnsive investigation. The present petition, therefore, cannot be examrned in isolation from the petitioner's broader involvement in multiple such offences' Ile further submitted that in his voluntary statement 9. dated 1 I .\2.2O2O , the petitioner admitted to controlling lhe entire operation, including GST hlings, handling credentials, and managing records, for the bogus f,rrms He also confessed to having created these hrms with the sole intent to generate and pass on fake ITC in exchange for commission and that the petitioner has not retracted this statement' The claim made by lhe petitioner that witnesses were coerced ir-rto namrng him is untenable, particularly since the trial is ongoing and I { 7 sKs,J CrI.P-No.3453 of 2()25 witnesses are yet to be examined and cross-examined. Such claims can be appropriately adjudicated by the trial Court. Moreover, Shri Okha Ram, proprietor of M/s. Shakti Steel India, who has only studied up to the 8th standard, could not have devised such a complex GST scam u,ithout expert assistance. His own statements indicate that the petitioner handled all technical and financial aspects of the GST filings and transactions of his lirm, establishing the petitioner's active role in the fraud. 1O. Learned counsel for the respondents contended that the petitioner's contention regarding the adjudication proceedings is misconceived. Both the criminal and adjudication processes were independently initiated by the GST department, and the adjudication proceedings were conducted in accordance with the principles of natural justicc. 'l'he petitioner was given an opportunity to present his c:rse, submit documents, and attend a personal hearing, and the quasi-judicial order was passed based on the material on record. If aggrieved, the petitioner has a remedy of appeal, which he has already availed. Therefore, the findings of the adjudicating authority cannot be brushed aside as being '1 SKS'J Crl.P.No.3453 of 2025 sole ly based Thcrcfore, hc on statements recorded during investigatton' prayed the Court to dismiss the criminal petition. tn light of the submissions made by both the learned I I. counsel and upon perusal of the material available on record' this Court finds that the first contention of the petitioner is thathewasmerelyfunctioningasaconsultant'actingunder the instructions of the proprietors of various hrms' including accused No.1' It is submitted that he simply uploaded the invoices provided by the said proprietors ln support of this' reliance is placed on the statement of accused No' 1' who state<l that he had handed over physical copies of invoices to th, pctitioner lor uPloading'

12. However, a reading of various statements on record' particularly those made by individuals associated with other firms, rcveals that the petitioner was not just a passive consultant but actively managed GST hlings and invoice generation for several entities' including M / s' Mithra Enterprises. Even the proprietor of M/ s' Mithra Enterprises has stated that no actual goods were involved and that the I / 9 SKS,J Crl.P.No.3453 of 2O25 invoices were bogus. Therefore, at this stage, it cannot be said that the petitioner is not linked to the fraudulent filing of invoices, and the matter requires adjudication.

13. The second contention raised by the petitioner is that the summons issued by Respondent No.2 did not clarify whether he was being summoned as an accused or a witncss, thereby violating Instruction No.3 /2022-23. However, it is noted that the summons in question were issued in the ycar 2020, while the cited instruction came into effect much latcr. Hence, the instruction cannot operate retrospectively, and there is no merit in this contention.

14. The third contention is that the department has alreacly adjudicated the matter and imposed a penalqz of {1,0O,OOO/ on the petitioner, and such adjudication based solcly on sta[ements recorded by the investigating officer and he already filed appeal against the said hnding, whereas, the said departmental finding is in force as on today. Therefore, it is not a ground to quash the proceedings agains[ the petitioner and this is an issue to be determined during trial, particularly in light of the multiple statements implicating the petitioner'. SI{S,J Crl.P.No.3453 of 2O25 ,1

15. It is well established that the High Court, while exercising jurisdiction under Section 482 Cr.P.C., does not function as an appellate or revisional Court. The inherent powers undcr Sec[ion 482 are to be used sparingly and with caution. The present case involves incomplete and contested facts, and the evidence is yet to be tully collected and presented before the trial Court. Where both factual and legal issues are of signihcant compiexity and magnitude, and where a complete picture cannot be formed without fuli material and examination, the High Court should not prematurely interfere. Therefore, this petition is not iiable to be entertained at this stage and the same is liable to be dismissed. 7e,. Accordingly, this criminal petition is dismissed Miscellancous applications, if any pending, shall also stand close d. Sd/- B. CHANDRA PRAKASH ASSISTANT REGISTRAR //TRUE COPY// To, SECTION OFFICER Hyderabad 1 The Special Judge for Economic offences City Criminal Courts Nampally at 2. The Superintendent of Central Tax Anti Evasion Unit, Medchal, GST ^ Commissionerate, Medchal, Lakdikapul, fVJ.irUrO 3. Two CCs to the pUBLtC. pROSFgUioR, frigl C"r.t at Hyderabad. (OUT) 4. One CC to SRI D y L N CHARYULU nUroE"t" tOpUCt 5. Two CD Copies V ae. HIGH COURT DATED: 1110612025 I !a t) 1Fo 6 i- ,i(ri irI ;'ij AIJE 2ffi ,'. ORDER CRLP.No.3453 of 2025 CRIMINAL PETITION IS DISMISSED 1