LAHORE: The Lahore High Court (LHC) has decided that the Federal Board of Revenue (FBR) had no powers to summon record and data of taxpaying clients of lawyers.
A division bench of the LHC on Friday held that communication of a client with his lawyer was a “privileged communication” and the entire legal system would collapse if a lawyer is forced to disclose anything about this “privileged communication”.
A bench consisting of Justice Syed Mansoor Ali Shah and Justice Shujaat Ali Khan held this while dismissing an intra court appeal filed by the Lahore Inland Revenue (IR) Intelligence and Investigation director against a single bench order of January 16, 2014. The court declared as illegal the summons issued to a lawyer to disclose the name of his client, owner of a firm involved in a billions of rupees scam. The bench held that no one could force a lawyer to disclose any information about his client.
The bench observed, “There is no denying the fact that counsel-client relationship being fiduciary in nature cannot be allowed to be betrayed at any cost. Unless an advocate is personally involved in the commission of a cognizable offence, he enjoys immunity from appearance before investigation officer.” The bench held that the counsel-client privilege enjoyed a pivotal role in the legal system with the result that no authority was permitted to inquire an advocate about any matter which he has come across during the course of his engagement with his client. The bench observed that if a counsel opts to share anything about a particular party, he would spoil the dignity of his profession on the one hand and would be held liable to misconduct on the other hand. The bench held that respondent Aslam Hashim Butt did not have any material relating to the criminal case. He could neither be summoned to tender evidence nor required to produce any document. The bench observed that Article 12 of Qanun-e-Shahadat Order 1984 provides a protection to the counsel against disclosure of confidential communication with his client. The bench remarked that the investigation officer could use all means available to him under the act, but in no way could ask the respondent’s counsel to disclose identity of his client. The bench held if this was permitted perhaps nobody would trust his counsel and share the vital information with him/her.
The bench held that the FBR had no powers to summon record and data of taxpaying clients of lawyers. The FBR should collect details of taxpayers from its own resources because lawyers could not be used for this purpose. The bench held that the FBR could use other ways to stop tax evasion.
Earlier, the appellant submitted that during a drive against fraudulent tax adjustments availed by various registered firms, it was found that M/s Pearl Enterprises of Lahore was involved in illegal tax refund. As a result, it issued a notice to the firm to explain that why its registration may not be suspended.
Advocate Aslam Hashim Butt filed the reply to the notice. The investigation officer of the department issued summons to Butt, asking him to disclose the name of the owner of the firm, which the department could not find out. The appellant said the counsel refused to appear before the investigation office saying that he was not bound to disclose information about his client. He requested the court to declare illegal the summons issued to him.
