Delhi High Court allows GST search of advocate's office, says privilege can't bar probe into lawyer's conduct

The Delhi High Court on Thursday dismissed a plea filed by an advocate challenging a GST Department search at his office and the seizure of his computer and other documents [Puneet Batra v. Union of India & Ors]. 

A Division Bench of Justices Anil Kshetarpal and Shail Jain ruled that advocate-client privilege cannot operate as an absolute bar against an investigation into the conduct of an advocate.

“There can be no dispute that communications and material protected by advocate-client privilege are entitled to the protection recognised in law. However, such privilege cannot operate as an absolute bar against an investigation into the conduct of the Advocate himself, where the Respondents have placed prima facie material indicating that the Petitioner may have acted beyond the role of a legal adviser and may have been involved in the affairs under investigation," the Court observed.

Advocate Puneet Batra had approached the High Court challenging the search by the Anti-Evasion Branch of Central Goods and Services Tax Department at his office and the consequent seizure of his computer’s central processing unit (CPU) and other documents. 

Batra is a member of the Delhi High Court Bar Association (DHCBA), the Sales Tax Bar Association and the New Delhi Bar Association.

The GST Department said that it was investigating a gaming company named Martkarma Technology Pvt Ltd (MPTL) and that Batra was not only representing the firm as a lawyer, but was involved in running its business. 

Batra contended that the search targeted materials protected by the attorney-client privilege relating to his legal services and that the GST Department had no grounds to search or seize documents unless there was evidence showing his personal involvement in illegality beyond legal representation.

The Court observed that the search authorisation issued by the department was valid and that Batra’s cabin formed part of the premises of Bass Legal (a tax consulting firm established by Batra's father), which was covered by the authorisation.

The mere fact that the cabin was being used by an advocate did not render the search unauthorised, the Court said. It also distinguished between privileged communications and material relating to an advocate’s own affairs or conduct.

The Bench held that privilege attaches to the nature and circumstances of the communication and does not automatically protect every document or electronic file found in an advocate’s possession.

"Consequently, material relating to the independent affairs, transactions or activities of the Advocate himself cannot, merely by reason of its being found in his office, be placed beyond the reach of a lawful investigation," the Court said.

Ultimately, the Court directed the authorities to use the cloned copy of the seized computer data and confine their examination to material relevant to the MTPL investigation.

It clarified that its judgment does not permit unrestricted searches of advocates’ premises or dilute the protection accorded to genuinely privileged communications.

Senior Advocates N Hariharan, Avi Singh and Mohit Mathur with Advocates Vinit Bhatia, Animesh Gaba, Shikhar Garg, Yash Kadyan, Harsh Vardhan, Punya Rekha Angara, Amartya, Aman Akhtar, Vasundhara Raj Tyagi, Arjan Singh Mandla, Apoorv Kumar, Krishna Shukla, Vignesh and Bhavya Chhikara appeared for Puneet Batra.

Solicitor General Tushar Mehta, Additional Solicitor General SV Raju, along with Advocates Akash Panwar, PC Aggarwal, Digvijay Dam, Aman Mehta, Madhav Goel, Annam Venkatesh, Aditi Andley, Aryansh Shukla, Agrimaa Singh and Abhimanyu Kapoor appeared for the Union of India.

[Read Judgment]