Harbhajan was handed a three-Test ban by match referee Mike Procter after being found guilty of directing a racist insult towards Australia all-rounder Andrew Symonds.
The row resulted in India calling a temporary halt to their tour, but the third Test in Perth now looks set to commence as planned on Wednesday after Harbhajan was cleared to play pending the results of an appeal.
And Ganguly believes that Harbhajan should be cleared of any wrongdoing at the Sydney Cricket Ground.
"I really doubt he said what he is meant to have," Ganguly told TV channel Star Cricket.
"Under pressure a lot of things come out and Australia also do it, but I think Harbhajan is just a competitor on the field.
"He bowled well with not much luck in Sydney and batted brilliantly. He will give 100% on the field every time."
The fallout from the second Test has seen many question whether gamesmanship in cricket has gone too far and, while Ganguly has no problem with sledging, he believes that personal abuse has no place in the game.
"I don't think it has any role in cricket," he said. "Sometimes it does happen in the heat of the moment, everyone is playing for their place and their reputation is at stake.
"I don't think going at each other is the right way to play and sometimes things happen in the heat of the moment. Both sides could be under pressure to win the Test for their country, you react at times differently.
"What happened may not have looked nice from the outside, but I also quietly admired how desperate they (Australia) were to win. They were desperate and that's not a bad thing in sport.
"We had a tough Test match in terms of some decisions, if not the Test could have gone our way. But that's the way it goes.
"On the other hand, it shows why Australia win so many Test matches because when they see a chance to win they can do anything.
"Of course there has to be a limit somewhere. The last Test match has been a bit different, but it's OK otherwise," he added.
Captains Anil Kumble and Ricky Ponting reportedly agreed before the series that, for any contentious catches, both sides would trust the word of the fielder.
At times during the second Test, that agreement seemed to have been forgotten and umpire Steve Bucknor has been replaced by Billy Bowden for the Perth clash following a number of debatable decisions in Sydney.
Although Ganguly admits that fielders have a role in helping umpires with some decisions, he believes the final judgment should stand with the officials.
"Fair enough I understand the catches agreement, if that's the decision between captains I think it's fine," he said,
"In modern day cricket I think the fielders should have some responsibilities. But I think umpires also have a role to play in it. You can leave it to the fielder, but at the end of the day the umpires have to make the judgment."
