Eight years after his inputs triggered tax-evasion proceedings against two firms and resulted in the recovery of ₹12.49 crore, the informant can finally hope to receive his promised reward. The CGST authorities have assured the Bombay High Court that the quantification process is underway and the informant will soon receive his payout.
A division bench of Justice Ravindra V Ghuge and Justice Hiten S Venegavkar last week recorded the statement of an assistant commissioner of CGST and central excise that “the statement made in paragraph 22 of the Affidavit-in-Reply… had been erroneously typed. The said statement stands deleted”. The statement further noted the assurance that the petitioner’s claim is being processed “strictly in accordance with the procedure applicable and within a short period”.
The court also observed that the respondents are at liberty to take a decision on advance payment to the petitioner, prior to the returnable date, signalling a push towards interim disbursal.
The proceedings arise from a petition by a GST informant, who claimed that despite actionable intelligence provided in 2017, leading to tax proceedings against M/s Logicash Solutions Pvt Ltd and M/s Trans Treasure Services (India) Pvt Ltd, no reward had been paid to him to date.
While admitting his petition filed through advocate Diptendu Bose on February 18, the court had noted that the informant, whose identity was required to remain confidential, was now exposed, having been compelled to file the suit as he had not received the promised financial reward. The court directed that the petitioner be referred to as “Mr XYZ” in all records.
When the matter was heard on March 30, a bench of Justices Ghuge and Abhay J Mantri was informed by counsel for the central government agencies that the petitioner’s grievance was being addressed and that the reward would be quantified in accordance with procedure.
The centre also sought to correct its affidavit dated March 16, stating that the paragraph asserting that “the Petitioner is not entitled to any relief and the Petition deserves to be dismissed” had been erroneously worded and would be deleted.
In its affidavit-in-reply, the centre noted the financial scale of the case while resisting immediate payout, stating that show-cause notices issued to the two entities were adjudicated in 2023, with demands of ₹14.77 crore (partly confirmed) and ₹8.57 crore respectively, and recording that an “aggregate net cash recovery of ₹12,49,92,114… across both the entities” has already been effected during the investigation.
It also contended that under the central board of indirect taxes and customs (CBIC) informer reward scheme, “final reward is payable only after the entire process of adjudication, appeal, or revision is concluded, and only based on recoveries actually realized”, emphasising that reward remains “ex gratia and is not a vested right”, with sanction and quantum to be determined by the competent reward committee.
The affidavit further attributed the delay to pending insolvency proceedings involving both entities, stating that corporate insolvency resolution and liquidation processes have affected recovery timelines and that “the base for computing the final reward is uncertain until resolution/liquidation outcomes”. It maintains that while reward processing “has been duly initiated” in one case, consideration in the other is contingent on finality of proceedings.
