TaxTMI 
TaxTMI 
2026 (9) TMI 1369
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....hanu Gulati, Mr. Sourabh Kumar and Ms. Yamini Singh, Advs. Mr. Anurag Ojha, SSC along with Mr. Dipak Raj, Mr. Aryaman Singh Chouhan and Mr. Aditya Chaudhary, Advs. Mr. Varun Mishra, SPC along with Ms. Shreeya Sud and Mr. Ashar Hussain, Advs. JUDGMENT PER ANIL KSHETARPAL, J.: 1. Through the present Writ Petition, the Petitioner, who claims to be an Advocate, challenges the search conducted by the Respondents on 25.07.2025 at the premises of M/s Bass Legal LLP [hereinafter referred to as 'Bass Legal'], including the cabin being used by the Petitioner, and the consequential seizure of his CPU and other documents. The Petitioner also challenges the panchnama drawn on 25.07.2025 and the summons issued to him on the same date. 2. The principal grievance of the Petitioner is that the search of his cabin and seizure of his CPU was unauthorized and contrary to the protection available to communications between an Advocate and his client. It is further contended that the Respondents could not have accessed or seized the electronic data available on the Petitioner's computer, particularly when the same was likely to contain privileged and confidential information pertaining not on....
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....8. MTPL is stated to have engaged the Petitioner for professional services in the field of taxation and corporate compliances from June 2023 onwards. According to the Petitioner, he rendered professional services to MTPL in relation to Goods and Services Tax, filings before the Registrar of Companies, Income Tax returns, Tax Deducted at Source returns, Intellectual Property Rights, Trademark registration, Cyber-crime matters and other legal compliances. 9. According to the Petitioner, from October 2023 onwards, MTPL independently took over its statutory and financial compliances and obtained possession of the relevant data, documents and records maintained by the Petitioner during the period of his engagement. The Petitioner states that thereafter he was not involved in the routine statutory or financial compliance work of MTPL and was extending legal assistance to the company, as and when required, particularly in relation to cyber-crime cases. 10. On 04.09.2024 and 05.09.2024, the Respondent Department conducted a search at the registered premises of MTPL. The Petitioner was one of the authorised representatives of MTPL during the said search. According to the Petitioner, s....
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....er contends that the computer contained confidential and privileged material relating to MTPL as well as his other clients. 16. The panchnama dated 25.07.2025 records the search proceedings, the documents resumed and the CPU seized from the cabin of the Petitioner. It also records that a summons was issued to the Petitioner requiring him to appear before the Respondent Department on 28.07.2025. 17. Since the search and seizure were challenged before this Court, the matter was taken up on 28.07.2025. At that stage, the Court, inter alia, noted the issue concerning advocate-client privilege and directed the Respondent Department to place its stand on record. The Court also directed that the CPU should not be opened or its contents downloaded without the presence of the Petitioner or his authorised representative. 18. The order dated 28.07.2025 is reproduced below: "1. This hearing has been done through hybrid mode. CM APPL. 45388/2025 (for exemption) 2. Allowed, subject to all just exceptions. Application is disposed of. W.P.(C) 11021/2025 & CMAPPL. 45387/2025 3. This matter has been listed before the Court in the typed supplement....
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....ppear on the said date, however, a written representation was filed by him which was also taken on record. On 10th June, 2025 a third summon received directing appearance on 12th June, 2025, however, the Petitioner could not appear on the said date as he was travelling. Finally, on 26th June, 2025 he was again served with another summon dated 19th June, 2025 and on 27th June, 2025 he appeared before the Anti-Evasion Branch, CGST Delhi East, and gave his statement. 10. The grievance of the Petitioner presently is that on 25th July, 2025 the Anti-Evasion Branch, CGST Delhi East, conducted a search at the office of the firm and the Petitioner's office situated at Second Floor, Unit No. DGL 224, DLF Galleria Mall, Mayur Vihar, Phase-1 Extension, New Delhi 110091. During the said search various documents relating to the client have been resumed by the GST Department. In addition, the Partnership Deed related to the firm and other documents, have also been resumed by the GST Department. The GST Department has also seized electronic gadgets being a complete CPU having 1250 GB. The documents resumed and the electronic gadgets seized have been recorded vide a punchnama dated 25....
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....and the protection of data pertaining to third-party clients of the Petitioner. Various safeguards were consequently prescribed in respect of the examination, cloning and identification of data contained in the CPU. The order dated 09.09.2025 is reproduced below: "Order dated 09.09.2025: 1. This hearing has been done through hybrid mode. 2. The present petition has been filed, inter alia, challenging the search at the office of the Petitioner conducted by the GST Department on 25th July, 2025, and the consequent seizure of the Central Processing Unit (hereinafter "the CPU") and other documents as being illegal. 3. The Petitioner Mr. Puneet Batra is an advocate who is stated to be a member of the Delhi High Court Bar Association as also the Sales Tax Bar Association and the New Delhi Bar Association (Patiala House District Court). As per the petition, he is a regular practitioner in diverse fields of law including direct and indirect taxation, school fee regulation matters, cyber law, and other criminal matters. 4. The firm M/s. Bass Legal LLP (hereinafter "the firm") is a tax consulting firm run by the Petitioner's parents, and it is....
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.... been resumed by the GST Department. In addition, the Partnership Deed related to the parents' firm and other documents, have also been resumed by the GST Department. The GST Department has also seized electronic gadgets being a complete CPU having 1250 GB. The documents resumed and the electronic gadgets seized have been recorded vide a panchnama dated 25th July, 2025. 9. Pursuant to the said search and seizure, a summon has also been issued to the Petitioner on 25th July, 2025 to appear before the GST Department on 28th July 2025, at 12:30 p.m. 10. The present writ petition was filed on an urgent basis at that stage. On 28th July 2025, the Court had heard the ld. Sr. Counsels for the Petitioner, as also Mr. Aditya Singla, Id. SSC appearing on behalf of the GST Department and directed as under: "14. Considering the facts of the case, this Court would like to be, first satisfied as to in what manner a search and seizure was conducted at the office of an Advocate, inasmuch as any documents that may have been given by the client to his lawyer are purely confidential in nature and are protected by advocate-client privilege. 15. The Advocate cann....
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....im directions already granted on 28th July, 2025 shall continue till the next date of hearing." 13. Thereafter, on 1st September 2025, a short note was handed over by Mr. Singla. The said note sets out the alleged role of the Petitioner in the conduct of the business of the client i.e. M/s Martkarma Technology Pvt. Ltd. The said client was running an online gaming company under the domain name '11winner.com. Various statements recorded by the GST Department during the investigation were also filed along with the said note. The same were retained in a sealed cover. The remand applications were also produced before the Court and Mr. Singla was directed to place the same on record. 14. Today, submissions on behalf of the Petitioner have been made by Mr. N. Hariharan, Mr. Kirti Uppal and Mr. Avi Singh, ld. Sr. Counsels. 15. Ld. Sr. Counsels for the Petitioner placed reliance on a judgment of the Supreme Court in Civil Appeal No. 8129 of 2022 titled Madhyamam Broadcasting Limited vs Union of India to argue that, the manner in which a sealed cover is sought to be produced and relied upon, without giving copies to the Petitioner, would be contrary to law. It....
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.... A perusal of the panchnama reveals the manner and details in which the CPU has been seized. The same is extracted below: "Panchnama dated 25.07.2025 drawn on the spot at the registered premises of M/s Bass Legal LLP, i.e. Second Floor, Unit No. DGL224, DLF Galleria, Mayur Vihar Phase 1 Road, New Delhi-110091. S. No. Name Father's Name Address Age Pancha 1 Jatin Kumar Sh. Prem Dass H-410, B-block, Gali No.-10, shakurpur, Delhi-110034 30 Pancha 2 Sandeep Kumar Sh. Chandrakant E-252, Khajuri Khas, Gali No. 15, Delhi-110094 37 Today i.e. on 25.07.2025, we the above named panchas, on having been called upon by the officer Sh. Piyush Soni, Inspector, Anti Evasion, Central GST Delhi East Commissionerate, C.R. Building, IP Estate, Delhi 110002 (herein after referred to as the officer) presented ourselves near DLF Galleria Mall, Mayur Vihar Extention, New Delhi-110091 to witness the search proceedings to be carried out at principal place of business of M/s Bass Legal LLP, Second Floor, Unit No.DGL224, DLF Galleria, Mayur Vihar Phase 1 Road, New Delhi-110091. The officers introduced themselves by showing us their identity cards ....
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....ri, Advocate and other for Sh. Mahesh Kumar Batra, Tax Consultant. The officers, in front of us, the Panchas, asked Sh. Mahesh Kumar Batra about all the Partners of the Company, on which Sh. Mahesh said that he and his wife Smt. Poonam Batra are the current partners of the company. Further, on being asked about Sh. Puneet Batra, Sh. Mahesh Kumar Batra stated that Sh. Puneet Batra is his son and Ex-partner of M/s Bass Legal LLP till 07.09.2019. Further, Sh. Mahesh Kumar Batra submitted the Partnership deed dated 06.09.2019 as evidence of the same. Thereafter, on being asked about the whereabouts of Sh. Puneet Batra, Sh. Mahesh Kumar Batra said that Sh. Puneet Batra is advocate by profession and he looks after taxation matters in the said firm. CPU black color (Fingers brand) RAM-8GB, Internal storage-1250GB, without Serial Number Thereafter, the officers started search proceedings at the premises. During the search proceedings, some documents related to M/s Martkarma Technology Private Limited (GSTIN:-07AAQCM1321F120) were found at the premises of M/s Bass Legal LLP, which were resumed by the officers for investigation purpose. Details of the resumed documents seen....
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....ld show that the CPU of the Petitioner was seized in the presence of, Sh. Mahesh Kumar Batra, Petitioner's father, but in the absence of the Petitioner. A perusal of the photographs on record further reveals that the password to the Petitioner's computer appears to have been obtained by the officials of the GST Department. The said photographs show that the GST officials have opened and accessed the computer of the Petitioner. 22. Needless to add, GST officials ought not to be permitted to open the CPU or computer of any advocate without his presence and consent, inasmuch as the same could lead to serious breach of confidentiality and advocate-client privilege. The GST Department is cautioned that, unless there are exceptional circumstances and subject to further orders that may be passed by the Court, if any advocate's office is to be searched or computer is to be opened, the same ought to take place in the presence of the advocate and not otherwise. 23. At this point in time, the Court is, however, inclined to permit the CPU of the Petitioner to be examined subject to the following conditions: (I) Persons in whose presence the CPU shall be e....
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.... (ii) The other steps that the GST Department intends to take against the Petitioner or any other person based on the said data; (iii) The role of the Petitioner as is revealed from the various statements recorded, in a redacted form, without revealing the names of the persons who have disclosed the said data; (iv) The data determent in terms of paragraph 23(II)(i), 23(II)(ii) and 23(II)(iii). 25. This affidavit, in a redacted form, shall be supplied to ld. Sr. Counsels for the Petitioner and shall be filed in the Registry. On the next date of hearing, however, the non-redacted affidavit shall also be shown to the Court. 26. The inspection of the CPU of the Petitioner, in the presence of the persons as directed above, shall take place on 11th September 2025 and 12th September 2025 from 11:00 am onwards on both days. 27. The fee of the IT officials of the Delhi High Court is fixed at lumpsum Rs. 1,00,000/- each, which shall be shared equally by the Petitioner and the GST Department. 28. After the affidavit is filed, the legal issues which have been raised in the present matter shall be considered. 29. In the meanti....
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.... is being carried out against M/s Martkarma Technologies Pvt. Ltd, (hereinafter, 'M/s Martkarma'), the gaming company that is stated to have engaged the Petitioner for rendering various professional and legal services. Accordingly, a redacted copy of the affidavit has been handed over to ld. Sr. Counsels for the Petitioner. 7. The submission on behalf of ld. Solicitor General on behalf of the GST Department is that, the Petitioner-Mr. Puneet Batra was in fact, gaining 0.7% of revenue, which was being collected by M/s Martkarma, and was therefore in a partnership, and was not merely acting as an Advocate for the M/s Martkarma. However, this position is completely disputed by the Petitioner. 8. On the basis of the affidavit, the submission of ld. Solicitor General on behalf of the GST Department is that, there are various employees and other officials of M/s Martkarma, including directors, etc., who have repeatedly made statements that the Petitioner was actively involved in the running of M/s Martkarma, and was not merely associated in his professional capacity as an Advocate under advocate-client relationship. 9. Presently, the prayer sought by th....
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....nected to a monitor, a keyboard, and a mouse. Upon accessing the same, the following shall be determined: (i) When was the last date when the data was accessed by any person. (ii) What was the nature of the files accessed on 25th July 2025, when the GST officials had inspected the said CPU. (iii) Whether any files have been deleted, copied, orremoved from the said CPU at any point in time and if so, details of the same along with the dates and time. (2) The entire hard drive of the CPU shall be cloned, and a cloned copy shall be given to the Petitioner. (III) Identified Data to be copied on a hard disk: (1) After the above procedure is undertaken, with the assistance of the Petitioner, all the files related to the client i.e. M/s Martkarma Technology Pvt. Ltd. and any entities/individuals who may be related to the said client shall be identified. The files so identified shall be copied on a hard disk and supplied to the GST Department for further investigation. (IV) Steps to be followed post determination of data: (1) After the above procedure is undertaken, the CPU itself shall be sealed and shall remain in th....
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....has informed the Court that the total data copied from the CPU onto the hard drive is stored in two separate hard disks, i.e., HD1 and HD2, along with two hash value certificates, which were handed over to the Petitioner i.e., Mr. Punit Batra. 17. Pertinently, the Local Commissioners Report, filed by Mr. Sarsij Kumar and Mr. Zameem Ahmad Khan, also records that there was some dispute between the Petitioner and the GST officer concerned, in respect of certain company related files in HD2, and no consensus could be reached. Even in respect of files pertaining to M/s Martkarma, where there was an agreement between the parties, files could not be handed over to the GST Department, as the Petitioner had declined to release the emails and their attachments citing an advocate-client privilege. 18. In this regard, the report of the Local Commissioners records as under: "1. In compliance with the directions contained in the order of the Hon'ble Court, clones of two different Hard Disks i.e. HD-1 & HD-2 (along with hash values certificates Annexure Z) were duly handed over to the Petitioner, Mr. Puneet Batra. two 2. During execution of the commission, ....
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....rd in the present report." 19. The application is presently under consideration for parsing of the data to make it searchable. Let the parsing of the entire data of CPU be done in the presence of the following persons: i. Local Commissioners appointed by the Court: Two senior officials of the IT Department, Delhi High Court, i.e., Mr. Sarsij Kumar, Director (IT Branch) (Mob. No. 9650006723) and Mr. Zameem Ahmad Khan, Joint Director (IT Branch) (Mob. No.9650006732). ii. Persons on behalf of the Petitioner: Two Counsels from Petitioner's side, i.e., Mr. Abhishek Kumar and Mr. Akshit Sharma, Advocates. iii. Persons on behalf of the GST Department: Two officials from Respondent's side, i.e,. Mr. Jyotiraditya, ADG, CGST (Delhi) East and Mr. Gajendra, Superintendent, CGST (Delhi) East. 20. The parsing of the data shall be done in the Directorate General of GST Intelligence, National Forensic Sciences University, Ministry of Home Affairs Lab. 21. After the data is parsed, a copy of the same shall be provided to the Petitioner, and shall be retained on a new hard drive by the Court appointed Commissioners. The same shall be kept....
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.... GST Department concerning the company/persons/entities under investigation, in relation to the M/s Martkarma, be brought on record. 31. List for hearing on 4th December, 2025. 32. In the meantime, interim directions granted earlier, shall continue till the next date of hearing." 21. It is also relevant to note that the Petitioner has admitted in the present proceedings that certain files were deleted from a remote location while the search proceedings were underway. 22. During the course of hearing, when the matter had reached the stage of rebuttal, this Court also offered the Petitioner an opportunity to identify the files pertaining to his clients other than MTPL so that the same could be secured and excluded from the material to be made available to the Respondent Department. The said offer was, however, declined by the Petitioner. 23. The aforesaid factual background has given rise to the rival contentions advanced by the parties, particularly with respect to the legality of the search and seizure, the applicability of advocate-client privilege, the examination of the electronic material seized from the Petitioner, the production of certain material ....
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....ms and intends to make a deposit in furtherance thereof, the payments are routed through Indian entities specifically created for this purpose, thereby disguising the true nature of the transactions. One such entity is MTPL, which, according to the Respondents, was essentially controlled by the Petitioner along with others. ii. It is submitted that the Petitioner is essentially a conduit and beneficiary of offshore online gambling. At present, the investigation has revealed that MTPL has received approximately Rs.1306 crores from users towards enabling participation in gambling activities on offshore websites, on which 28% GST is payable, amounting to Rs.365.68 crores. The GST paid by the Petitioner, according to the Respondents, does not constitute the statutory liability arising from the aforesaid transactions. The illegal model continues to operate, necessitating further investigation. iii. It is further submitted that the Petitioner was not acting as an Advocate for MTPL in a manner so as to attract advocate-client privilege, as he was deeply embedded in the operations of MTPL and directly benefitted therefrom. For every rupee deposited by a user in MTPL, 0.7%....
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.... authorization issued by the competent authority was for search of the said premises. 29. The Petitioner has annexed copies of photographs which prove that the office of Bass Legal consists of open space where arrangement for sitting of staff has been made. Thereafter, there are two cabins in the rear which open towards the space assigned for the staff. One cabin belong to the Petitioner's father, whereas, the second cabin belongs to the Petitioner. Thus, the Petitioner's cabin is inside the office of Bass Legal and the cabin is part and parcel of the same. A perusal of the Petitioner's letterhead also shows that the Petitioner's address is also same and identical. 30. This Court has also examined the reasons to believe recorded by the concerned officer before granting permission for the search. The satisfaction required at this stage is not a finding of guilt or a determination of the merits of the allegations against the person whose premises are searched. The Court is required to examine whether there was material before the competent authority on the basis of which the statutory power under Section 67(2) of the CGST Act could have been exercised. On such examination, this....
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....y from the fact that the material is found in the office or possession of an Advocate. Consequently, material relating to the independent affairs, transactions or activities of the Advocate himself cannot, merely by reason of its being found in his office, be placed beyond the reach of a lawful investigation. 35. It is also necessary to bear in mind that the privilege contemplated under Section 132 of the BSA is, in substance, a privilege conferred for the protection of the client and not a personal privilege of the Advocate. The statutory scheme itself makes this position clear, inasmuch as an Advocate is prohibited from disclosing a professional communication except with the express consent of the client. The purpose of the provision is to ensure that a client is able to communicate freely and candidly with his Advocate, without apprehension that such communication would subsequently be disclosed to his detriment. The obligation of the Advocate to maintain confidentiality is, therefore, the consequence of the privilege which vests in and protects the client. 36. In the present case, the Respondents have specifically alleged, on the basis of material collected during investi....
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....rises material collected by the Respondents during the course of the ongoing investigation, including proceedings and statements of persons examined during such investigation. The Respondents have placed the said material before the Court to enable the Court to examine the basis of the investigation and the role attributed to the Petitioner, and not as material on the basis of which any final adjudication of liability is being undertaken. 41. At the stage of an ongoing investigation, the Court is required to exercise due caution in directing disclosure of the investigative material placed before it, particularly where such disclosure may reveal the statements of persons examined by the investigating agency or the course and direction of the investigation. The fact that such material has been produced before the Court does not, by itself, confer upon the Petitioner an unrestricted right to obtain copies thereof. 42. The statutory protection contained in Section 192(5) of the Bharatiya Nagarik Suraksha Sanhita, 2023 [hereinafter referred to as 'BNSS'], though applicable in the context of police case diaries, also reflects the principle that investigative records are not ordinar....
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....nd probative worth of such material, if and when required, would have to be considered at the appropriate stage and in accordance with law 47. The next argument of learned senior counsel representing the Petitioner is that no SCN has been issued to MTPL. The absence of a SCN, at this stage, cannot by itself render the search or the summons issued to the Petitioner illegal. The proceedings in question are at the stage of investigation and issuance of a SCN is a subsequent stage, if the investigation ultimately results in initiation of adjudicatory proceedings. The contention, therefore, does not affect the legality of the search conducted on 25.07.2025. It is also pertinent to note that the Petitioner had been issued summons on several occasions, vide communications dated 22.09.2024, 01.10.2024, 10.06.2025 and 19.06.2025, and had appeared before the Respondent Department and furnished his statement. 48. As far as the alleged change of stand is concerned, the contention of learned senior counsel is based upon the fact that, at the time of seeking remand of Mr. Suraj Kumar @ Suraj Mishra, Mr. Arvind Kumar and Mr. Pawan Kumar, the Respondents had stated that Mr. Suraj Kumar was l....
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....ompliance with an administrative procedure, in the absence of any demonstration that the statutory authorization itself was invalid or that the search was conducted without jurisdiction, would not render the search void ab initio. 52. The position arising from the Board Resolution dated 29.09.2025 also requires to be noticed. By the said Resolution, the Board of Directors of MTPL has taken note that, inter alia, the Petitioner, Mohit Bhandari and Bass Legal LLP are in possession of statutory, financial, accounting, tax, data, files, books of accounts, invoices, agreements, email and physical correspondence and other material, whether physical, electronic or digital, belonging to MTPL. The Board has thereafter expressly consented and recorded that it has no objection to the handover and submission of all such documents and material, including electronic and digital material and email exchanges, to the CGST authorities, and has undertaken to extend full cooperation in connection with the inquiry, verification, investigation or proceedings. 53. Thus, insofar as the material belongs to MTPL and is covered by the aforesaid Resolution, the client itself has, as on date, expressly c....
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.... the Petitioner is an Advocate. There can be no dispute that communications and material protected by advocate-client privilege are entitled to the protection recognised in law. However, such privilege cannot operate as an absolute bar against an investigation into the conduct of the Advocate himself, where the Respondents have placed prima facie material indicating that the Petitioner may have acted beyond the role of a legal adviser and may have been involved in the affairs under investigation. This Court is, at this stage, not called upon to return any final finding as to the role of the Petitioner. The question is only whether the search and seizure could be undertaken on the basis of the material available to the Respondents, subject to appropriate safeguards in respect of privileged and confidential material. 58. At the same time, the protection available to confidential communications and data belonging to persons unconnected with the investigation has to be maintained. The safeguards already directed by this Court in respect of examination of the CPU and identification of data sufficiently address this concern. It is also relevant that the Petitioner has admitted that ce....