GST & Anti  

Fraud Department Cannot Issue Notices to Lawyers of Alleged Tax Evaders : Calcutta High Court

 

 

There are a lot of cases wherein the notices are issued by revenue authorities to the lawyers and CA’s for cases pertaining to their clients. It may be noted that the Calcutta High court recently held that 𝐆𝐒𝐓 & 𝐀𝐧𝐭𝐢-𝐅𝐫𝐚𝐮𝐝 𝐃𝐞𝐩𝐚𝐫𝐭𝐦𝐞𝐧𝐭𝐬 𝐂𝐚𝐧𝐧𝐨𝐭 𝐈𝐬𝐬𝐮𝐞 𝐍𝐨𝐭𝐢𝐜𝐞𝐬 𝐭𝐨 𝐋𝐚𝐰𝐲𝐞𝐫𝐬 𝐨𝐟 𝐀𝐥𝐥𝐞𝐠𝐞𝐝 𝐓𝐚𝐱 𝐄𝐯𝐚𝐝𝐞𝐫𝐬.

The case citation is as under:

𝐇𝐢𝐦𝐚𝐧𝐠𝐬𝐡𝐮 𝐊𝐮𝐦𝐚𝐫 𝐑𝐚𝐲

𝐯𝐬.

𝐭𝐡𝐞 𝐒𝐭𝐚𝐭𝐞 𝐎𝐟 𝐖𝐞𝐬𝐭 𝐁𝐞𝐧𝐠𝐚𝐥

𝐀𝐩𝐩𝐞𝐚𝐥 𝐍𝐨. 𝐌𝐀𝐓/𝟏𝟎𝟓𝟒/𝟐𝟎𝟐𝟑; 𝐎𝐫𝐝𝐞𝐫 𝐝𝐚𝐭𝐞𝐝 𝟏𝟒.𝟎𝟔.𝟐𝟎𝟐𝟑

Let us have a short overview of the case:

The GST and Anti-Fraud Departments had issued a series of standard format notices under Section 160 Cr.P.C to the lawyers of the alleged tax evaders requiring their attendance during investigations. The lawyers argued that the GST and Anti-Fraud Departments are not authorised to issue notices to them, as their communication with clients is protected by Sections 126 and 129 of the Evidence Act.

Judgment by Calcutta High Court:

The Calcutta High Court upheld the attorney-client privilege, emphasizing that the communication between lawyers and their clients is protected under Sections 126 and 129 of the Evidence Act.

The court ruled that the GST and Anti-Fraud Departments do not have the jurisdiction to issue notices to lawyers representing alleged tax evaders, given the protected nature of their communication.

The High Court criticized the Anti-Fraud Department’s use of standardized notices, stating that such an approach wrongly assumed all assessees to be fraudsters.

Consequently, the court set aside the notices and granted the department the liberty to conduct proper, assessee-centric investigations.