Mumbai: The Bombay high court issued a notice to the Central govt on a petition by an informer seeking directions to govt to give him his reward of the entire 20% of the over Rs 23 crore that was recovered in a tax evasion case.
Justices Revati Mohite Dere and Neela Gokhale on Friday heard a petition by the ‘informer/whistleblower’ XYZ, who was aggrieved with the Rs 25 lakh reward given by the Directorate General of Central Excise Intelligence (DGCEI), now the Directorate General of Goods and Service Tax Intelligence. He was entitled to receive “Rs 4.73 crore.”
His petition stated that in Sept 2013, he gave specific information to DGCEI that a company manufacturing an insecticide and its formulations was evading excise duty and taxes. In July 2014, DGCEI conducted an operation and found the evasion of a huge amount of central excise and customs duties and service tax. There was a total recovery of ‘Rs 30.58 crore,’ including Rs 6.9 crore interest. After a delay of over six years, in March 2022, DGCEI disbursed a ‘one-time final reward’ of Rs 25 lakh “in an opaque manner without providing reasons how the said reward amount was arrived at.” Thereafter, the informer requested it to reconsider the award for enhancement but got no response. He moved HC in May 2024.
His petition cited a clause in the finance ministry’s July 2015 revised ‘Guidelines for Grant of Reward to Informers and Government Servants’ that entitles him upto 20% of the duty/tax evaded plus fine and penalty levied. He was entitled to a Rs 4.7 crore reward of the recovered Rs 23.6 crore. “However, the petitioner has only been rewarded with an amount of Rs 25 lakh, which is barely 1% of the eligible amount,” it added.
His petition said that due to his accurate information, including on the nature of the transaction and modus operandi of evasion, the officers could recover relevant documents and proceed with the investigation. In June 2019, in view of the delay in disbursal of rewards to numerous informers, DGCEI instructed proposals for reward to be submitted within a month of the case attaining finality in favour of the department.
On Friday, the informer’s advocate, Shantanu Shetty, said that the case is covered by a 2023 Supreme Court judgment to reconsider the reward given to an informer. His client was the whistleblower, and his information led to a total recovery of over Rs 30 crore. The judges then directed the issue of notice to the Central government and adjourned the hearing to March 20.