A two-judge bench of the Gujarat High Court has held that the misconduct proceedings under the Gujarat VAT Act cannot be initiated against advocates, Chartered Accountants and Cost Accountants since the respective professional bodies, i.e, Bar Council, ICAI, ICWAI etc are the authorities empowered to prosecute them for the same.
The petitioner is holding a certificate as a Sales Tax Practitioner from the year 1977. In 1983, he enrolled as an Advocate under the State Bar Council of Gujarat. The VAT authorities initiated misconduct proceedings under section 81 of the Gujarat VAT Act against the petitioner by alleging that the petitioner had connived with the dealers in the questionable transactions.
As per Section 81 of the Act, a person who is entitled or required to attend before any authority in connection with any proceedings under the Act can be of three categories namely (I) a person can be authorised in writing to appear before such authority (II) a Legal Practitioner or a Chartered Accountant or a Cost Accountant or (III) a Sales Tax Practitioner who possesses the prescribed qualification entered in the list.
Differentiating the two terms Sales Practitioner and Legal Practitioner, the bench comprising Biren Vaishnav and Anant S Dev said that the term legal practitioner would include an advocate.
“Reading of Section 81(1) of the Act therefore makes it clear that an individual can appear before an authority in either of the capacities including one being a sales tax practitioner or a legal practitioner. The annexures to the show cause notice clearly suggest that the petitioner appeared before such authorities in the capacity of a legal practitioner and not as a sales tax practitioner. Sub-section 81(2) of the Act provides that whenever a legal practitioner or any other professional namely a Chartered Accountant or a Cost Accountant is found guilty of misconduct with any proceeding under the VAT Act, the authority empowered to take disciplinary action is the authority to which the members of the profession belong to. (emphasis supplied). Admittedly, the petitioner is a legal practitioner and therefore the domain to conduct any investigation or issue a show cause notice would be that of the State Bar Council. Section 35 of the Advocates Act 1961 clearly provides that it is the State Bar Council which has the power to take disciplinary proceedings for any professional and/or any other misconduct against an advocate,” the bench said.
Quashing the proceedings against the petitioner, the bench said that “It is therefore evident that a sales tax practitioner and a legal practitioner are distinct individual professionals and it is in this context that a segregation is made in Section 81(1) of the Act authorising each individual to appear in his respective capacity. Therefore, if a legal practitioner is to be proceeded against for any misconduct under the proceedings under the VAT Act, sub-section (2) of Section 81 of the Act makes it clear that such disciplinary proceedings have to be taken by the authority to which the member of such profession belongs to. Clearly, in the facts of the present case, it is the Bar Council of Gujarat which has the domain to initiate and conduct any proceedings for misconduct alleged to have been done by the petitioner. Once, the petitioner acquired the certificate of a legal practitioner by obtaining a licence on 10.08.1983, such a qualification supersedes the certificate of a sales tax practitioner and cloak of being a legal practitioner takes over and the petitioner loses his identity of a sales tax practitioner. The case therefore does not fall within clause (c) of sub-section (1) of Section 81 of the Act.”
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