TaxTMI 
TaxTMI 
Use of Artificial Intelligence (Al) tools and other third-party online platforms by officers in the discharge of official duties - Confidentiality of taxpayer information under Sections 152, 158 and 158A of the TGST Act, 2017 - Obligations under the Digital Personal Data Protection Act, 2023 - Application of mind in quasi-judicial proceedings - Personal responsibility and liability of the officer
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.... Services Tax Act, 2017. 2. The Digital Personal Data Protection Act, 2023. 3. The Official Secrets Act, 1923. 4. The Telangana Civil Services (Conduct) Rules, 1964. 5. The Telangana Civil Services (Classification, Control and Appeal) Rules, 1991. *** I. BACKGROUND 1. Officers of the Department routinely handle highly confidential taxpayer information, including returns and annexures, financial statements, invoices, bank particulars, e-way bill data, intelligence inputs, audit records, investigation and inspection files, statements recorded during proceedings, legal opinions and internal Government communications. This information reaches the officer solely by force of statute, in the course of the discharge of his official functions, and is held by him in a fiduciary capacity on behalf of the State and of the taxpayer who was compelled by law to furnish it. 2. It has been brought to the notice of the undersigned that a number of officers of the Department have begun using Al-based tools to assist in the drafting of discrepancy reports, notices, orders and other proceedings, and in the analysis, translation and summarising of case records. It is stated categ....
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....t), or in any record of any proceedings under this Act shall, save as provided in sub-section (3), not be disclosed. (2) Notwithstanding anything contained in the Indian Evidence Act, 1872, no court shall, save as otherwise provided in sub-section (3), require any officer appointed or authorised under this Act to produce before it or to give evidence before it in respect of particulars referred to in sub-section (1). (3) Nothing contained in this section shall apply to the disclosure of - (a) any particulars in respect of any statement, return, accounts, documents, evidence, affidavit or deposition, for the purpose of any prosecution under the Indian Penal Code or the Prevention of Corruption Act, 1988, or any other law for the time being in force; or (b) any particulars to the Central Government or the State Government or to any person acting in the implementation of this Act, for the purposes of carrying out the objects of this Act; or (c) any particulars when such disclosure is occasioned by the lawful exercise under this Act of any process for the service of any notice or recovery of any demand; or (d) any particulars to a c....
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.... not obtained for transmission of his particulars to an Al platform, and no provision of law authorises it. 10. Section 158A - Consent based sharing of information. The Legislature has, by Section 158A, expressly provided that even the sharing of specified particulars furnished by a taxable person with another system notified by the Government requires the consent of the supplier, and, in respect of details of outward supplies, the consent of the recipient as well. If the sharing of taxpayer particulars between two arms of Government requires both an express statutory provision and the taxpayer's consent, the sharing of the same particulars with a private commercial platform, is impermissible. 11. Section 156 - Persons deemed to be public servants. Every person appointed to any office under the Act is deemed to be a public servant. The duty of confidentiality created by Sections 152 and 158 attaches to the officer in that personal capacity, and not merely to the Department as an institution. III. PERSONAL RESPONSIBILITY AND LIABILITY OF THE OFFICER 12. The obligation cast by Section 158 is cast upon the public servant, not upon the Department. Where an officer trans....
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....f his duties under the said sections or for the purposes of prosecution for an offence under this Act or under any other Act for the time being in force, he shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to twenty-five thousand rupees, or with both. (2) Any person - (a) who is a Government servant shall not be prosecuted for any offence under this section except with the previous sanction of the Government; (b) who is not a Government servant shall not be prosecuted for any offence under this section except with the previous sanction of the Commissioner. (c) Liability under the data protection law - taxpayer particulars handled by officers are "personal data" for the purposes of the Digital Personal Data Protection Act, 2023. The Department handles such data as a Data Fiduciary and is obliged to process it only for the purpose for which it was furnished and to protect it by reasonable security safeguards. Transmission of such data to a public Al platform, where it may be stored, retained, accessed by the provider's personnel or used to train third-party models outside the control of the Government,....
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....ols; it regulates it. The Department's policy is one of encouragement of the responsible use of such tools, and not of prohibition of their use. This circular does not bar an officer from using Artificial Intelligence tools in the discharge of his duties. What is prohibited is the transmission of taxpayer particulars to a platform not authorised for the purpose, and the substitution of Al-generated output for the officer's own application of mind. An officer who keeps within those two boundaries is encouraged to use such tools. 20. Absolute prohibition on disclosure of taxpayer particulars. No officer or staff member of the Department shall type, paste, upload, scan, photograph, dictate, transcribe or otherwise transmit, into any public or commercial Artificial Intelligence tool, chatbot, generative Al platform, document analyser, summariser, translation or transcription service, or cloud-based analytical software, any taxpayer-related information - including, but not limited to, GSTIN, PAN, legal name or trade name, address and contact particulars, bank account details, returns and annexures, financial statements, invoices, e-way bill data, extracts from discrepancy rep....
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....e law. Always verify the relevance of the citation, etc before using it in your order. 26. Deletion of residual data. Every officer and staff member shall, to the extent technically feasible, delete any taxpayer-related data entered in the past into any Al platform, delete the associated chat history and stored files, and disable any setting permitting retention of inputs for model training. No chat history or file containing taxpayer information shall hereafter be retained on any personal device or official system. 27. Supervisory responsibility. All Additional Commissioners, Joint Commissioners and Deputy Commissioners shall periodically sensitise the officers and staff working under their control, and shall satisfy themselves, in the course of inspections and reviews, that these instructions are being observed. VI. SERVICE OF THIS CIRCULAR AND DATED ACKNOWLEDGEMENT 28. The Joint Commissioner (ST) concerned and all the Additional Commissioners (ST) shall cause this circular to be served upon every officer and every member of the staff working under their respective administrative control, and shall obtain from each of them a signed acknowledgement bearing the date of ....