The Delhi High Court has held that an advocate-client privilege claim cannot, by itself, prevent a GST investigation where there is prima facie material suggesting that the advocate may have been involved in the affairs under investigation.
The Bench comprising Justice Anil Khetarpal and Justice Shail Jain has simultaneously emphasised that confidential and privileged material belonging to unrelated clients must continue to receive protection.
The proceedings arose from a search conducted by the Anti-Evasion Branch of CGST Delhi East on July 25, 2025, at the premises of Bass Legal LLP at DLF Galleria Mall, Mayur Vihar, New Delhi.
An advocate, challenged the search of the office and his cabin, seizure of his CPU and other documents, the panchnama prepared during the search, and the summons issued to him.
The principal grievance was that the seized computer could contain confidential and privileged communications between him and his clients. According to Batra, the GST authorities could not access or seize electronic data that potentially contained privileged information relating not only to Martkarma Technology Pvt. Ltd. but also to his other clients.
The GST department however, contended that the petitioner was not merely acting as legal counsel. They relied upon material gathered during investigation to contend that he was allegedly involved in the affairs and operations of the company itself.
The Department therefore argued that advocate-client privilege could not be invoked to prevent investigation into the advocate’s own alleged involvement.
The services described in the proceedings included GST matters, Registrar of Companies filings, income-tax returns, TDS returns, intellectual property and trademark matters, cyber-crime cases and other legal compliances.
The GST Department had earlier conducted a search at Martkarma’s registered premises on September 4 and 5, 2024. Batra was one of the authorised representatives of the company during that search.
Thereafter, he received multiple summonses from the Anti-Evasion Branch, CGST Delhi East. He submitted replies and representations and eventually appeared before the Department on June 27, 2025, where his statement was recorded. According to Batra, he had consistently maintained that his role was that of legal counsel and consultant and had also invoked professional privilege.
The search of Bass Legal was conducted pursuant to an authorisation dated July 24, 2025, issued under Section 67(2) of the CGST Act, 2017.
During the search, GST officials found documents relating to Martkarma Technology Pvt. Ltd. at the premises. They also seized the CPU installed in Batra’s cabin.
The panchnama recorded that the premises were approximately 900 square feet and contained a staff area and two cabins. The CPU seized was described as a black-coloured Fingers-brand CPU with 8 GB RAM and 1250 GB internal storage.
The panchnama further recorded that the search commenced at approximately 1:12 PM and concluded at around 9 PM. Documents relating to Martkarma, the LLP agreement and a supplementary agreement were also resumed during the search.
When the matter came before the High Court on July 28, 2025, the Court expressed concern regarding the manner in which a search had been conducted at an advocate’s office.
The Court noted that documents given by a client to a lawyer could be confidential and protected by advocate-client privilege. It observed that an advocate should not be subjected to harassment unless there was material suggesting that the advocate was personally involved in the alleged illegality.
The Court therefore directed that the CPU should not be opened or its contents downloaded without the presence of Batra or his authorised representative.
The Court subsequently permitted examination of the CPU but imposed several safeguards.
The examination was directed to take place in the presence of Batra and his representatives, along with senior IT officials of the Delhi High Court and a forensic expert representing the GST Department.
The Court also directed that the examination should determine: when the data was last accessed; what files were accessed on July 25, 2025; whether any files had been deleted, copied or removed; and the relevant dates and times of such activity.
Importantly, the entire hard drive was to be cloned and a cloned copy provided to Batra. Files relating to Martkarma and entities or individuals connected with the company could thereafter be identified and supplied to the GST Department.
The Court also directed that the GST Department file an affidavit setting out allegations arising from the recovered data, proposed further action, and the role allegedly played by Batra based on statements recorded during the investigation.
During the subsequent examination, the CPU data was copied onto two hard disks, HD1 and HD2, with corresponding hash-value certificates. These cloned hard disks were handed over to Batra.
However, disputes arose concerning certain company-related files. The Local Commissioners recorded that even in respect of files identified as belonging to Martkarma, Batra declined to release emails and attachments, including deleted and recovered items, citing advocate-client privilege.
Those disputed files were placed in a separate folder titled “Dispute” for further directions from the Court. Data over which no objection was raised was supplied to the GST Department with corresponding hash values.
The Court subsequently permitted parsing of the entire CPU data at the Directorate General of GST Intelligence, National Forensic Sciences University, Ministry of Home Affairs laboratory, with representatives of both sides and the Court-appointed Local Commissioners present.
During the proceedings, the GST Department placed before the Court material concerning Batra’s alleged role in the affairs of Martkarma.
According to the Department’s submission, Batra was allegedly receiving 0.7% of the revenue collected by Martkarma, which, according to the Department, indicated that his relationship with the company went beyond that of an advocate.
The Department also relied upon statements of employees, directors and other persons associated with Martkarma, which it claimed indicated Batra’s active involvement in running the company’s affairs.
Batra disputed these allegations.
The High Court, at the interim stage, expressly refrained from making a final finding on whether Batra had actually participated in running the business.
The central legal question before the Court was whether an advocate’s status and the possibility that his computer contained privileged communications could render the GST search and seizure illegal.
The Court drew an important distinction between two situations.
First, communications and material genuinely protected by advocate-client privilege continue to receive legal protection.
Second, privilege cannot automatically be used as a shield against an investigation into the advocate’s own conduct where the investigating authority has placed prima facie material indicating that the advocate may have acted beyond the role of a legal adviser.
The Court therefore examined the legality of the search separately from the protection that had to be afforded to confidential data belonging to unrelated clients.
The Court ultimately held that the search of Bass Legal, including the cabin used by Batra, was carried out pursuant to a valid authorisation under Section 67(2) of the CGST Act.
The Court held that the search could not be treated as unauthorised merely because the person whose premises or computer was searched happened to be an advocate.
At the same time, the Court clarified that this did not mean that GST authorities could freely access every document or file found on an advocate’s computer. Privileged communications and confidential material belonging to persons unconnected with the investigation remained protected.
The Court recognised that confidential communications between an advocate and client are entitled to protection. However, that privilege does not create an absolute prohibition against investigating an advocate where there is prima facie material suggesting that the advocate himself may have been involved in the conduct under investigation.
The Court specifically clarified that it was not returning any final finding regarding Batra’s alleged role in Martkarma’s affairs. The issue before it was whether the search and seizure could legally be undertaken on the basis of the material available to the Department, subject to safeguards protecting privileged and confidential material.
The Court simultaneously emphasised the need to protect information belonging to third-party clients.
It held that the Department’s access to material relating to Martkarma did not automatically permit examination of unrelated third-party client data stored on the same computer.
The Court noted that the safeguards imposed during the CPU examination were designed specifically to prevent unrelated confidential material from being exposed to the investigating authorities.
The Court made it clear that the fact of deletion, by itself, could not be treated as proof of wrongdoing by Batra. However, the Court observed that the Department was entitled to examine the circumstance as part of its ongoing investigation, particularly in relation to the electronic data covered by the search.
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