Calcutta High Court rules Attorney-Client Interaction Privileged; Tax Authorities Cannot Issue Notice to Lawyer

Calcutta High Court rules Attorney-Client Interaction Privileged; Tax Authorities Cannot Issue Notice to Lawyer

Explains that Section 126 of the Evidence Act was designed to abort such attempts on intruding their privacy

The Calcutta High Court has held that the Goods and Services Tax (GST) department cannot issue notice to the advocate appearing on behalf of the assessee.

The bench comprising Chief Justice TS Sivagnanam and Justice Hiranmay Bhattacharyya observed that Sections 126 and 129 of the Evidence Act, 1972 protect communications between a lawyer and a client. It’s a settled legal position that communication is privileged if made to a legal advisor by a client after the commission of a crime and with a view to his defence. However, it is not privileged if made before the commission of the crime or for the purpose of being guided or committing it further.

The applicant is a practicing advocate and a third party to the writ proceedings. he said that the order sought to be impugned by him affects him drastically.

The GST department had objected to the maintainability of the appeal at the instance of a third party. It submitted that pursuant to the directions issued in the writ petition, interim in nature, the authorities had investigated. It unearthed several fake companies that committed GST fraud. Thus, criminal and other proceedings were initiated against them.

The Court observed that the appeal was maintainable because soon after the impugned order was passed by a single Judge bench, the Anti-Fraud Department of the Kolkata Police and the GST department issued a series of notices to all the advocates who were regularly appearing for their clients. The cases pertained to GST, the West Bengal Value Added Tax, and the West Bengal Services Tax Acts and related enactments.

On noting the pattern, the bench advised the authorities that they had no jurisdiction to issue notices to the advocates calling for information regarding their clients. The information was a privileged client-advocate communication.

The Judges explained that Section 126 of the Evidence Act was designed to abort the attempt to intrude on the privacy of the client-advocate. It prohibited an attorney from disclosing an attorney-client communication without the client’s consent.