When WhatsApp Becomes Your Ledger: Legal & Evidentiary Value of GST Assessments Based on Mobile Data

I. The new "invisible books of account"

For a huge number of GST taxpayers-especially SMEs-business now runs on a simple triangle: mobile phone + WhatsApp + screenshots.

Orders, rate negotiations, dispatch confirmations, e-invoices, bank UTRs and even rough estimates often exist only as chat messages or photos of slips scribbled in a godown.

When a search or inspection happens under GST, this "informal" record is usually the first thing officers look at. Mobile phones and laptops are seized, WhatsApp chats are downloaded, and those chats are then cited as evidence of unbilled turnover, under-reported sales or bogus ITC. Many assessments today are substantially driven by what is found in a phone, rather than what appears in the statutory books.

The key question is: can a GST demand legally stand only or mainly on the basis of mobile data and WhatsApp chats? The answer lies at the intersection of search powers, constitutional privacy, rules on self-incrimination and the law of electronic evidence.

II. Can GST officers seize mobile phones at all?

Section 67 of the CGST Act empowers the proper officer to search and seize "goods, documents, books or things" where he has reasons to believe they are relevant for any proceedings. Revenue authorities treat mobile phones, tablets and laptops as "things" and the data in them as "documents", and record them in the panchnama and seizure memo.

On the other side stands Article 21 and the right to privacy recognised in Justice K.S. Puttaswamy (Retd.) v. Union of India. A smartphone today contains a person's entire life-personal chats, photos, health data, location history, banking credentials. Seizing it is far more intrusive than taking away a physical file.

This creates an unresolved tension:

So far, there is no direct Supreme Court ruling on GST mobile-phone seizure, but challenges on privacy grounds are very likely to intensify.

III. Forcing you to give your password – self-incrimination or not?

Once a phone is seized, the next practical hurdle for the department is access. Typically, the taxpayer is "asked" to share the PIN, pattern, password or biometric unlock.

In Virendra Khanna v. State of Karnataka (2021), the Karnataka High Court held that compelling disclosure of a password does not violate Article 20(3) (protection against self-incrimination) and does not, by itself, offend the right to privacy when done pursuant to a lawful search. The Court treated the password like a key to a locker-not as personal testimony.

In other words:

Virendra Khanna therefore closes one door for taxpayers (resisting password disclosure), but opens another: a sharper focus on how that digital evidence is later authenticated and used.

IV. Legal framework for electronic evidence

1. Under GST – Section 145 CGST Act

Section 145 of the CGST Act specifically recognises:

as "documents" for GST purposes and declares them to be admissible as evidence without production of the original, provided statutory conditions are satisfied.

Crucially, sub-section (2) requires a certificate:

signed by a person in a responsible position. This mirrors the classic Section 65B certificate under the (erstwhile) Indian Evidence Act.

So, a WhatsApp chat printout or exported PDFis not automatically gospel truth. If it is secondary electronic evidence (a copy/printout/cloud extraction), it should be supported by a Section 145(2) certificate, failing which its reliability can be seriously questioned.

2. Central Excise – Section 36B

The same architecture existed earlier in Section 36B of the Central Excise Act, 1944, which laid down that computer printouts and electronic records would be admissible only if backed by a certificate from a responsible official describing the device, process and conditions under which the record was generated.

This earlier jurisprudence is important because multiple excise/customs cases have already tested these provisions and are now being relied upon in GST disputes.

3. Evidence law – from Section 65B to Section 63 BSA

Section 65B of the Indian Evidence Act (now replaced by Section 63 of the Bharatiya Sakshya Adhiniyam, 2023) is the master provision on electronic records. It insists that when an electronic record is produced in copy form, a certificate must accompany it:

signed by a responsible person. Section 63 BSA goes a step further by expressly roping in an expert certificate.

These provisions are stricter and more detailed than Section 145 CGST, but they serve the same purpose: to minimise the risk of tampering, manipulation and selective extraction of digital evidence.

4. IT Act – Section 4

Section 4 of the Information Technology Act, 2000 puts the final seal: where the law requires information to be "in writing", that requirement is satisfied if the information is available in electronic form and accessible for future reference. Thus, properly authenticated WhatsApp records can conceptually stand on the same footing as written correspondence.

V. Case law: how have courts treated WhatsApp chats?

1. Anvar P.V. v. P.K. Basheer – the foundational rule

In Anvar P.V. v. P.K. Basheer, the Supreme Court held that electronic records can be proved only in the manner prescribed by Section 65B. Oral evidence or traditional rules of secondary evidence cannot substitute the statutory certificate for electronic records.

The rationale is simple: electronic material is easy to fabricate, edit or delete. Without formal safeguards, "trials based on electronic evidence can become a travesty of justice."

2. Supreme Court's scepticism on chats: A2Z Infraservices

In A2Z Infraservices Ltd. v. Quippo Infrastructure Ltd., the Supreme Court made a telling remark:

"What is the evidential value of WhatsApp messages these days? Anything can be created and deleted…"

The Court refused to treat isolated WhatsApp messages as conclusive admissions and declined to order deposit of money purely on that basis. The message is clear: chats, by themselves, are weak evidence unless properly proved and corroborated.

3. Customs / Excise precedents – strict insistence on certificates

Several indirect tax decisions have squarely dealt with computer printouts and mobile data:

From these cases, some broad principles emerge:

1. WhatsApp chats are admissible in theory, but fragile in practice;

2. Certificates under the relevant electronic-evidence provisions are mandatory, unless the record is primary (original device, properly produced in court);

3. Uncorroborated chats or loose printouts cannot, by themselves, sustain a tax demand.

VI. Newer decisions: a shift towards greater reliance on digital trails?

Recent income-tax decisions show courts becoming more comfortable with digital evidence-provided it is specific and corroborated.

1. Giriraj Pugalia – specific, corroborated chats can trigger reassessment

In Giriraj Pugalia v. ACIT (Rajasthan HC, 2025), WhatsApp chats recovered from a third party referred to identified plots, parties and cash amounts. These were corroborated by other digital material and a detailed satisfaction note. The Court held that such chats fell within "other documents" for Section 153C and justified reassessment of the assessee.

Key takeaway: where chats show clearly identifiable transactions that match independent material, they can legitimately be used to open and support tax proceedings.

2. Vetrivel Minerals (VV Minerals) – strict Evidence Act rules don't bind assessment

In ACIT v. Vetrivel Minerals (Madras HC, 2025), the Court held that Section 65B of the Evidence Act / Section 63 BSA do not apply to income-tax assessment, appellate or tribunal proceedings, which are quasi-judicial. Strict rules of evidence bind "courts", not tax authorities, though taxpayers may still challenge authenticity and demand fair opportunity to rebut.

This logic is equally relevant under GST: Section 145 is a self-contained code for electronic evidence at the adjudication stage. Once the matter reaches a High Court or Supreme Court in writ/appeal, the stricter rules of BSA / Evidence law re-enter the picture.

VII. GST perspective: chats ≠ supply, without a live transaction trail

Under GST, tax is levied on "supply" of goods or services (Section 7) and collected as per Section 9. For a WhatsApp chat to support a GST demand, it must be part of a coherent narrative showing an actual taxable supply, not merely an intention or discussion.

For example, if officers find photos of estimates or handwritten slips in WhatsApp images, they must still establish:

Linkage between the digital trail and statutory returns (GSTR-1, GSTR-3B, books of account).

This is where classic evidence law resurfaces. In CBI v. V.C. Shukla (Jain Hawala case) and later Common Cause v. Union of India (Sahara/Aditya Birla diaries), the Supreme Court held that vague entries in loose sheets or diaries are not "books of account" and cannot, by themselves, fix liability without independent, trustworthy corroboration.

By analogy, a screenshot or PDF of a WhatsApp note is like a loose sheet: it may be a starting point for investigation, but not the ending point for assessment.

Add to this Section 136 CGST, which requires that confessional statements and admissions be evaluated for relevance and reliability. An "admission" extracted during a tense search, referring to vague "cash dealings on WhatsApp", cannot automatically replace hard evidence of actual supply.

VIII. Practical implications & defence strategy for GST taxpayers

Putting all of this together, the legal position under GST can be broadly summarised:

1. Mobile data and WhatsApp chats are not irrelevant – they are clearly recognised as electronic records and can be relied upon in assessments.

2. However, their evidentiary strength is conditional:

○ compliance with Section 145 CGST (and when in court, Section 63 BSA / 65B principles);

○ availability of supporting documents such as invoices, transport documents, stock records and bank entries; and

○ a logical chain of events connecting the chat to a taxable supply.

3. Chats found on a third party's device are particularly weak unless the department can link the assessee through corroborative evidence (payments, common employees, stock movement, etc.).

4. Mere admission like "we sometimes sell without bills" in a statement or chat, without quantification and corroboration, should not justify arbitrary best-judgment estimates.

From a defence and risk-management perspective, taxpayers should:

IX. Conclusion – walking the tightrope between convenience and compliance

Digital conversation has become the nervous system of modern commerce. Phones carry not just our social lives but our negotiations, discounts, side deals and sometimes our tax risks.

GST law, read with evidence and IT laws, is steadily adapting to this reality: WhatsApp may be informal, but it is not invisible.

At the same time, courts have repeatedly warned against treating chats as infallible proof. Authentication, certification, corroboration and context remain essential. The emerging trend-even under the new direct-tax framework that explicitly contemplates use of social-media and electronic data-is to allow revenue authorities to mine digital trails, but to insist that demands be grounded in a robust evidentiary matrix, not in screenshots alone.

For businesses, the message is simple:

use WhatsApp, but don't let WhatsApp become your only books of account. The more your real business story lives in proper documents and systems, the harder it becomes for an isolated chat to be turned into a full-blown GST liability.

Disclaimer: The information given in this article is solely for purpose of understanding the law. It is completely based on the interpretation of the author and cannot be constituted as a legal advise, the author of this article and Lawcrux team is not responsible for any legal issues if arises on the basis of the interpretation given above.