The Supreme Court recently stayed key directions issued by the Delhi High Court (HC) upholding the search of a lawyer’s office by authorities from the goods and service tax (GST) department, raising questions over how investigators can separate legally privileged material from evidence collected during a search.
A bench of justice Dipankar Datta and justice Sheel Nagu was hearing advocate Puneet Batra’s challenge to the 18 September 2026 judgment of the Delhi HC, which had upheld the search of his office and the seizure of his computer and documents by the GST department.
The Supreme Court issued notice in the matter and stayed, for now, the High Court’s directions relating to cloning and examination of the seized electronic material. It also granted Mr Batra interim protection from coercive action until 28 September 2026, when the matter will come up for further hearing.
The bench made it clear that it was examining the legality of the search at this stage and was not deciding whether any coercive action against Mr Batra should be taken.
A key concern before the Supreme Court was the handling of material that could be protected by the advocate-client privilege.
“You collect evidence, no problem. But how will you segregate the confidential/privileged material?” the bench asked.
Additional solicitor general (ASG) SV Raju, appearing for the GST authorities, submitted that investigators could redact privileged portions before providing the material.
The bench, however, questioned who would determine which portions were confidential or legally privileged.
“How will you decide that? You can’t decide that,” the court observed.
The exchange brought the issue of professional privilege to the centre of the dispute. Advocate Batra has maintained that the computer and documents seized from his office could contain confidential communications relating not only to the client under investigation but also to several other clients.
The ASG argued that the authorities were not required to disclose the reasons to believe underlying the search at this stage.
The court subsequently directed that notice be issued, while making clear that its immediate examination was confined to the legality of the search.
“So far as the directions are concerned, that it will be cloned etc, we will stay that,” the bench said.
The court did not pass any order stopping coercive action generally, but granted interim protection to Mr Batra until the next hearing. His counsel had told the court that the GST (goods and services tax) authorities had summoned him to appear before the investigating officer.
The bench permitted advocate Batra to respond to the summons and appear before the officer concerned on Wednesday.
The dispute stems from a GST search conducted on 25 July 2025, at the premises of Bass Legal LLP, including Mr Batra’s cabin. The authorities seized his CPU, documents and other material during the operation.
The search was conducted under Section 67(2) of the Central GST Act, 2017.
Advocate Batra subsequently approached the HC, challenging the search, seizure and summons issued to him. His principal objection was that the seized electronic device contained confidential and privileged communications involving his clients.
According to the High Court record, Mr Batra had been providing professional services to Martkarma Technology Pvt Ltd (MTPL), a gaming company, since 2023. His work for the company was stated to include GST and other tax matters, corporate compliance, income-tax and TDS returns, intellectual property work, trademark registration and cyber-crime-related matters.
Advocate Batra maintained that he was acting as a legal adviser and consultant to MTPL.
The GST authorities, however, alleged that his role went beyond providing legal advice and that he had become involved in the affairs and operations of the company under investigation.
The department relied on material gathered during its investigation, including statements recorded from persons connected with the matter, to contend that there was prima facie material warranting further investigation into Mr Batra’s role.
A division bench of justice Anil Khetarpal and justice Shail Jain of the Delhi High Court dismissed Mr Batra’s petition on 18 September 2026.
The High Court held that advocate-client privilege protects genuine confidential communications between lawyers and their clients, but cannot be treated as an absolute shield against an investigation into the lawyer’s own conduct where authorities have placed prima facie material suggesting that the advocate may himself be involved in the affairs being investigated.
The court also upheld the search conducted under Section 67(2) of the CGST Act.
It rejected the argument that the possibility of privileged material being present on the seized computer, by itself, made the search unlawful. The fact that advocate Batra was a practising advocate did not, in the High Court’s view, automatically invalidate a search carried out under a valid statutory authorisation.
The Supreme Court has now put the High Court’s directions concerning the handling and cloning of the seized electronic material on hold while it examines the challenge.
