Himangshu Kumar Ray vs. State Of West Bengal
Original PDF →Facts
The appellant, Himangshu Kumar Ray, a practicing advocate, sought leave to appeal against an order dated April 3, 2023, passed by a learned Single Judge in WPA 16929 of 2022. The appellant was not a party to the original writ petition but claimed the impugned order significantly affected him. The State objected to the maintainability of the appeal by a third party, arguing that interim directions in the writ petition led to the unearthing of fake companies and initiation of criminal and other proceedings. The High Court granted leave to appeal, condoning a delay of 32 days. The Court noted that shortly after the Single Judge's order, the Anti Fraud Department and GST Department issued notices to advocates seeking information about their clients, which was later withdrawn after legal advice regarding attorney-client privilege.
Held
The Court held that the appeal is maintainable. It reasoned that the issuance of notices by the Anti Fraud and GST Departments to advocates, seeking information about their clients, constituted an infringement of attorney-client privilege. The Court relied on Sections 126 and 129 of the Evidence Act and the Supreme Court's decision in *State of Punjab v. Sodhi Sukhdev Singh*, emphasizing that communications between a lawyer and client are protected. The Court found that the authorities had no jurisdiction to issue such notices. Regarding the second issue, the Court held that the Anti Fraud Department had misconstrued and misunderstood the scope of the learned Single Judge's direction. The direction to investigate fake writ petitions and GST fraud was misinterpreted as a basis for issuing standardized notices under Section 160 Cr.P.C. to various assessees, which the Court deemed wholly illegal. The Court clarified the Single Judge's order by directing that investigations should be assessee-centric after a thorough study of documents by the GST Department, and only then should proceedings under the GST Act be initiated. If a criminal overt act is found, the matter should be handed over to the appropriate investigation authority. The notices issued under Section 160 Cr.P.C. were set aside.
Key Issues
1. Whether an intra-court appeal filed by a third party, who was not an original party to the writ petition, is maintainable when the impugned order has significant repercussions on their professional practice and client communications? (Question of law turning on principles of locus standi and third-party rights). 2. Whether the authorities, in implementing the directions of the learned Single Judge to investigate fake writ petitions and GST fraud, misinterpreted or misconstrued the scope of the court's order, particularly concerning the issuance of notices under Section 160 Cr.P.C. to assessees? Contentions: Appellant: Argued that the appeal is maintainable because the notices issued to advocates by the GST and Anti Fraud Departments infringed upon attorney-client privilege, citing Sections 126 and 129 of the Evidence Act and Supreme Court precedent in *State of Punjab v. Sodhi Sukhdev Singh* and *Bakaulla Mollah v. Debiruddin Mollah*. State: Vehemently objected to the maintainability of the appeal by a third party. Argued that the interim directions in the writ petition led to the investigation of fake companies and initiation of proceedings, thus the appeal should not be entertained.
Sections Cited
Section 126, Section 129, Section 160 Cr.P.C.
AI-generated summary — verify with the full judgment below
2023 Item No.9 gd/s MAT/1054/2023 IA NO: CAN/1/2023, CAN/2/2023 Re: CAN 2 of 2023
The applicant prays for leave to prefer appeal against the order dated 3rd April, 2023, whereby the writ petition being WPA 16929 of 2022 was disposed of by the learned Single Judge.
The applicant was not a party to the writ application. The applicant says that the order that is sought to be impugned by him, seriously affects him.
We have heard learned Counsel for the parties. 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. 4. Accordingly this application being CAN 2 of 2023 is allowed. Re: CAN 1 of 2023
2
CAN 1 of 2023 has been filed by the appellants seeking condonation of delay of 32 days in filing this appeal.
Learned counsel for the appellant has referred to the explanation which has been furnished in the application and also has made submission in respect of the explanation for the delay.
We find that the delay in filing this appeal has been sufficiently explained and the appellant was prevented from filing the appeal within time on account of bona fide reason.
Hence, CAN 1 of 2023 is, accordingly, allowed. The delay in filing the appeal is condoned.
Re: MAT 1054 of 2023
This intra court appeal by a third party is directed against the order passed by the learned Single Bench dated 3rd April, 2023 in WPA 16929 of 2022. 10. The petitioner is a practicing advocate and the third party to the writ proceedings.
Md. T.M. Siddiqui, learned State counsel has raised a vehement objection regarding the maintainability of the appeal at the instance of a third party and apart from that it is submitted that pursuant to the directions issued in the said writ petition which were interim in nature, the authorities conducted
3 investigation and several fake companies who have illegally committed GST fraud have been unearthed and criminal proceedings and other proceedings have been initiated. Therefore, it is submitted that this appeal is not maintainable.
We have heard Mr. Shraff, learned advocate appearing for the appellant on the above submission.
So far as the maintainability of the appeal is concerned, we are of the view that appeal is maintainable for the reason that soon after the impugned order was passed by the learned Single Bench the Anti Fraud Department of the Kolkata Police as well as the GST Department had issued a series of notice to all the learned advocates who are regularly appearing for their clients in cases pertaining to GST/WBVAT/WBST Acts and other related enactments. When this matter is brought to the notice of this Court, the authorities of the respondent were well advised that they had no juri iction to issue notices to the learned advocates calling for information regarding their clients as the information given by the clients is a privileged communication given to an advocate. At this juncture, it is relevant to take note of the decision of the Hon’ble Supreme Court in State of Punjab v. Sodhi Sukhdev Singh reported in AIR 1961 SC 493 wherein the Hon’ble Supreme Court held that
4 Sections 126 and 129 of the Evidence Act protect the communications between a lawyer and a client made during the employment of the lawyer. It is a settled legal position that a communication is privileged if it is made to a legal advisor by a client after the commission of a crime and with a view to his defence, but it is not privileged if it is made before the commission of the crime or wrong and for the purpose of being guided or assisted in furthering or committing it. Thus, Section 126 of the Evidence Act is designed to abort the attempt to intrude privacy of the close preserve of the fund of information conveyed by the client closeted in confidence. In Bakaulla Mollah v. Debiruddin Mollah (1911-1912) 16 CWN 742 (Cal) it is held that Section 126 of the Evidence Act prohibits an attorney from disclosing an attorney-client communication without the expression concerned of the client.
After being properly advised by the learned State counsel, those notices sent to the learned advocates were withdrawn by e-mails dated 5th June, 2023. 15. In the background of these facts, we are of the view that this appeal is maintainable.
The next issue is whether the order and direction issued by the learned Single Bench has been properly understood or misconstrued by the authorities of the Anti Fraud Department. The direction issued by
5 the learned Single Bench is that the police authorities shall also try to investigate from the angle as to how many fake writ petitions have been filed in this Court in the past before the said writ petitions were heard and had defrauded the government causing huge revenue loss.
In our view, the observation issued by the court has to be understood within the four corners of law. The police authorities have been directed to investigate and the observation of the court is to investigate about filing of fake cases. Unfortunately, the authorities of the Anti Fraud Department have misconstrued and misunderstood the scope of the direction which is clear from the notice issued under Section 160 Cr.P.C. to the Directors of various assessees. In those notices the FIR No.260 dated 30.09.2022 has been referred which has been registered by the Hare Street Police Station. Pursuant to the orders passed by the learned Single Bench of this court and without disclosing any details concerning the concerned assessee, the standard format has been adopted by the Anti Fraud Department by issuing notices under Section 160 Cr.P.C. We do not appreciate the manner in which the department has carried out the observations made by the learned writ court. If, according to the department, large scale fraud has been committed by the various assessees
6 there are the ways and means to investigate the same and the methodology adopted by the Anti Fraud Department by issuing standard format notices under Section 160 Cr.P.C. is wholly illegal. Therefore, we clarify the order passed by the learned Single Bench by directing the authorities both the revenue authorities as well as the police authorities who are to investigate the cases of revenue fraud to first conduct thorough study of the documents available with the GST Department and thereafter should channelise the investigation making it assessee sentric and not by resorting to issuing standardized format of notices which appear to be in the nature of a public notice. Therefore, the notices issued under Section 160 Cr.P.C. which are standardize 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 and not to generalize and grant all assessees throughout the State of West Bengal to be fraudsters this approach is not in accordance with law.
It is needless to state that it is the GST authorities who have first to conduct the thorough study and investigation to ascertain as to whether there has been any illegal availment of GST. Upon such assessment it will be well open to the GST authorities to initiate proceedings under the provisions of the GST Act. However, if the authority comes to the conclusion
7 that there is a criminal overt act attached to the said violation, then the matter should be handed over to the appropriate investigation authority who has to proceed in accordance with law.
With the above direction, the appeal stands disposed of.
(T. S. SIVAGNANAM)
CHIEF JUSTICE
(HIRANMAY BHATTACHARYYA, J.)
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.