Calcutta High Court’s Landmark Ruling on Appeals and Attorney-Client Privilege in GST Fraud Cases

LI Network

Published on: 7 September 2023 at 14:55 IST

The Calcutta High Court addressed crucial legal aspects regarding appeals, attorney-client privilege, and investigations linked to Goods and Services Tax (GST) fraud.

The case in question, CAN 2 of 2023, pertained to a request for permission to appeal an order issued on April 3, 2023, related to a writ petition.

The division bench, consisting of Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharya, granted leave to the applicant to proceed with the appeal, stating, “We are of the view that the applicant may have something to say. Hence we grant leave to the applicant to prefer appeal against the order dated 3rd April, 2023.”

In another case, CAN 1 of 2023, a request was made to condone a 32-day delay in filing an appeal. The court allowed the appeal and condoned the delay, citing a bona fide reason.

The most notable aspect of the judgment came in MAT 1054 of 2023, which involved an intra-court appeal by a third party against an order passed by a Single Bench on April 3, 2023, in a writ petition.

The State counsel objected to the maintainability of the appeal, arguing that GST fraud investigations had already commenced following the directions in the writ petition.

However, the court firmly asserted, “So far as the maintainability of the appeal is concerned, we are of the view that the appeal is maintainable.”

The court also delved into matters related to attorney-client privilege, referencing Sections 126 and 129 of the Evidence Act, which safeguard communications between a lawyer and a client made during their professional engagement.

The court stressed the critical importance of preserving the confidentiality of such communications.

Furthermore, the court noted that both the police and GST authorities had issued notices to lawyers involved in the writ petition but withdrew these notices after receiving legal advice.

The court expressed dissatisfaction with the approach taken by these authorities, stating, “We do not appreciate the manner in which the department has carried out the observations made by the learned writ court.”

The court emphasized that investigations should focus on specific cases rather than generalizing all assesses in West Bengal as fraudsters. “The notices issued under Section 160 Cr.P.C. which are standardized forms are set aside, and we give liberty to the Police Department as well as the GST Department to conduct a proper investigation qua the assessees,” the court clarified.

In conclusion, the judgment provides vital legal clarifications regarding appeals and attorney-client privilege while urging authorities to conduct thorough and lawful investigations into GST fraud cases.

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