The Delhi High Court ruled that advocate-client privilege does not serve as an absolute barrier to a GST investigation if there is prima facie evidence suggesting an advocate's involvement in the matters under investigation. This decision came in the case of Puneet Batra v. Union of India & Ors., where Batra, an advocate engaged by M/s Martkarma Technology Pvt. Ltd. (MTPL), was implicated in a GST investigation. The GST Department had conducted a search and seizure at Bass Legal LLP, where Batra previously worked, and collected documents and a CPU allegedly containing privileged information.
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Batra argued that the search violated advocate-client privilege, but the Department contended that evidence suggested his active involvement in MTPL's affairs beyond his role as legal counsel. The issue was whether the search under Section 67(2) of the CGST Act was illegal due to the potential presence of privileged communications.
The Court held that the search was valid under Section 67(2) of the CGST Act and could not be deemed unauthorized solely because Batra was an advocate. The Court noted that advocate-client privilege protects confidential communications but is not an absolute bar when there is evidence of the advocate's involvement. The absence of a show cause notice against MTPL did not invalidate the search, as the investigation was ongoing. Administrative instructions cannot override statutory search powers, and procedural deviations do not invalidate a search unless they breach mandatory statutory requirements.
The Court dismissed the writ petition but mandated safeguards for privileged and third-party client information. The GST Department is limited to using cloned data relevant to the MTPL investigation and must seek appropriate orders to access unrelated client data.
Order Date: 18 September 2026
Parties: Puneet Batra v. Union of India & Ors.
Facts -
- Puneet Batra, an Advocate, was engaged by M/s Martkarma Technology Pvt. Ltd. (MTPL) for various professional and legal services, including GST, tax, corporate compliance and cyber-crime matters.
- He was earlier associated with Bass Legal LLP, where he handled taxation matters. Following a GST search at MTPL in September 2024, he was repeatedly summoned by the Department and furnished his statement.
- He challenged the GST Department's search of Bass Legal on 25.07.2025, during which documents relating to MTPL and a CPU from his cabin were seized. He alleged that the computer contained privileged and confidential information of MTPL and other clients.
- Puneet Batra contended that the search and seizure violated advocate-client privilege, while the Department maintained that material collected during investigation indicated that he was actively involved in MTPL's affairs and was not merely acting as its legal counsel.
Issue -
- Whether the GST Department's search of Bass Legal and seizure of the Petitioner's CPU and documents under Section 67(2) of the CGST Act was illegal merely because the Petitioner was an Advocate and the seized material could contain privileged communications.
Order -
- The Court held that the search was conducted pursuant to a valid authorization under Section 67(2) of the CGST Act and could not be treated as unauthorized merely because the Petitioner was an Advocate. Advocate-client privilege protects confidential communications but cannot become an absolute bar where there is prima facie material regarding the Advocate's own involvement.
- The Court observed that the absence of an SCN against MTPL did not invalidate the search because the matter was still at the investigation stage. An investigation may evolve as new material emerges, allowing the Department to examine the Petitioner's role even if another person had earlier been identified as handling MTPL's affairs.
- The Court held that administrative instructions and circulars cannot override the statutory search power under Section 67. Therefore, alleged procedural deviations would not invalidate the search unless a mandatory statutory requirement affecting the validity of the authorization or jurisdiction was violated.
- While dismissing the writ petition, the Court retained safeguards for privileged and third-party client information. The GST Department may use the cloned data only for material relevant to the MTPL investigation and cannot access unrelated data of other clients without appropriate orders.
