ADVOCATES CANNOT BE HELD CRIMINALLY LIABLE FOR CONSPIRACY BASED ON PROFESSIONAL ADVICE OR ACTIONS TAKEN ON BEHALF OF CLIENTS

The petitioner, an Advocate on Record specialized in tax law, was engaged by a client (M/s ABA Traders) to challenge a GST assessment exceeding ₹8 crores.

Following instructions and interpreting prevailing judicial precedents, the petitioner filed statutory appeals and made a 10% pre-deposit utilizing the client’s Electronic Credit Ledger (Input Tax Credit).

The Appellate Authority dismissed the appeals on maintainability, ruling that pre-deposits cannot be made via Input Tax Credit.

Subsequently, the Deputy Commissioner of GST (Respondent No. 3) lodged an FIR against both the client and the petitioner, alleging a criminal conspiracy to evade tax and cause loss to the State.

On 08.05.2026, the police filed a charge-sheet and the Magistrate took cognizance on the same day.

The petitioner challenged the FIR, charge-sheet, and cognizance order via an amended writ petition.

1. Whether an Advocate can be held criminally liable for conspiracy solely for discharging professional duties and providing legal advice based on an interpretation of law.

2. Whether the acts of filing an appeal and making a pre-deposit in a professional capacity constitute an offense under Sections 61(2), 318(4), 336(3), 338, and 340(2) of the Bharatiya Nyaya Sanhita (BNS).

The Court emphasized the fundamental right to legal assistance and the professional immunity of Advocates under the Advocates Act and Articles 14 and 21 of the Constitution of India.

A professional act, even if based on an erroneous interpretation of law, does not constitute criminal conspiracy unless there is evidence of personal involvement in the client's business.

Reference to M/s Yasho Industries Ltd. v. Union of India which established the legal basis for making GST pre-deposits via Input Tax Credit.

The Court observed that the petitioner acted strictly in a "professional capacity" and that no evidence suggested he was a partner or had a vested interest in the client’s business.

The Court reasoned that the right of an Advocate to fearlessly represent clients—including those accused of heinous crimes—is the bedrock of the legal system; holding an Advocate liable for conspiracy due to a procedural or legal advice choice would destroy the independence of the Bar.

The Court found that even if the tax department disagreed with the method of pre-deposit, it was a "purely professional act" based on a plausible view of the law, and criminalizing such an act would force lawyers to prioritize their own defense over their clients'.

The Court further noted that the GST officer failed to provide any justification for nominating the Advocate in the FIR.

The Court held that the prosecution violated all known principles of criminal liability and hindered the constitutional right to legal counsel.

The Court further directed the Chief Judicial Magistrate to ensure a red-ink entry was made in the General Diary of the police station to record the quashing of these proceedings against the petitioner.