The Hon’ble Delhi High Court in the case of XY v. Union of India & Ors. [W.P.(C) 15498/2025, order dated October 9, 2025] held that the grant of reward to GST evasion informers is a discretionary matter and informers do not have an enforceable right to seek mandamus or directly challenge adjudicatory orders, as award or reward is not a right, but a privilege granted as per administrative guidelines.
Facts:
XY (“the Petitioner”) is an individual who provided information related to alleged GST evasion by M/s Shakti Enterprises.
The Union of India & Ors. (“the Respondent”) are authorities under the Central Board of Excise and Customs (“CBEC”), responsible for the decision and grant of informer rewards per the Notification dated July 31, 2015 by CBEC (Anti-Smuggling Unit).
The Petitioner claimed that after passing on actionable information leading to issuance of Show Cause Notice on M/s Shakti Enterprises on July 28, 2023 and substantial demand raised by order-in-original dated December 6, 2023, penalties and demands were imposed against the company and partners.
The Petitioner argued that based on the Notification and information provided, she should be granted reward for her role in exposing evasion and was aggrieved that post-appeal order dated July 15, 2024 led to substantial reduction in penalty and demands; only a minor demand was sustained, thus impacting her eligibility to claim reward.
The Respondent contended that the order-in-appeal set aside major penalties and demands, only partly sustaining initial orders, and emphasized that the Petitioner’s role was of an informer only, not a party in assessment proceedings. They further relied on Supreme Court precedent prohibiting enforceable claims for informer rewards.
The Petitioner was aggrieved by the reduction in final demand and by not being considered for any reward, thereby, approached the High Court under writ jurisdiction for mandamus, seeking enforcement of the alleged right to reward per CBEC’s Notification.
Issue:
Whether an informer in GST evasion proceedings has an enforceable right to claim reward or a writ of mandamus for its grant under Notification dated July 31, 2015?
Held:
The Hon’ble Delhi High Court in W.P.(C) 15498/2025 held as under:
- Observed that, “grant of an award or a reward to an informer is a discretionary grant and prima facie, the Petitioner is not entitled to challenge the order-in-appeal, since the status of the Petitioner is that of an informer. Such a person cannot create a lis on the ground of claiming of an award and contest the private Respondent on merits”.
- Noted that, a writ of mandamus cannot be issued at the behest of an informer as per Supreme Court decision in the case of Union of India & Ors. v. C Krishna Reddy [(2003) 12 SCC 627].
- Held that, the Petitioner’s affidavit be placed in sealed cover and listed the matter for maintainability arguments and that no right vests in an informer to directly agitate the merits of demand and assessment proceedings, the matter is now listing on December 18,
Our Comments:
The judgment clarifies the settled law that grant of informer reward—whether in GST or excise regime—is a purely discretionary matter, governed by administrative circulars and internal guidelines. No right accrues to the informer as per statute or notification, and courts will not compel administrative authorities to grant such rewards except for gross unfairness, fraud, or discriminatory policy violation.
Recent jurisprudence, notably the Bombay High Court in Darshan Singh Parmar v. Union of India & Ors. [WP 2283/2013, order dated June 24, 2025], holds that while informer rewards under tax laws are discretionary and not an enforceable legal right, once the Government establishes a reward scheme, authorities are expected to implement it transparently, efficiently, and without unreasonable delay. The Court deprecated unjustified administrative delays in paying admitted rewards, directed accountability for delayed payments, and emphasized that government commitments through policy or circulars must not be undermined by arbitrariness or whim, as this erodes public confidence and deters informer participation—making clear that although mandamus cannot lie except in cases of gross unfairness or fraud, as upheld by the Supreme Court in Union of India & Ors. v. C Krishna Reddy [(2003) 12 SCC 627], there remains a duty on authorities to ensure procedural fairness, due process, and timely action, so as not to frustrate the underlying public interest or defeat the objectives of the reward scheme
Relevant Extract of the Circular:
Circular No. 36/2018 – Customs dated October 5, 2018 by the Central Board of Indirect Taxes & Customs (Anti-Smuggling Unit)
“Subject: Grant of reward to informers and Government servants – amendments in existing reward guidelines issued vide Circular No. 20/2015 dated 31.07.2015 and as amended vide Circular No. 29/2016 dated 23.06.2016 – reg.
Kind reference is invited to Reward Guidelines issued vide Circular No. 20/2015 dated 31.07.2015 as amended by Circular No. 29/2016 dated 23.06.2016.
2. Consequent to the introduction of GST, a need was felt to include recovery in cases under CGST and IGST Acts under the Reward Guidelines to ensure their parity with cases booked under the Customs Act, NDPS Act, Service Tax and Central Excise Acts. References were also received in the Board to treat officers of other Government agencies, who play a role in the detection of cases, at par with CBIC officers, irrespective of the fact whether seizure has been effected by these agencies or by officials of CBIC. Further, it was also brought to the notice of the Board that for considering reward proposals of ₹ 50 lakh or more for informers, the composition of the Apex Reward Committee needed to be changed to include any two Principal Chief Commissioners / Chief Commissioners in place of the jurisdictional Chief Commissioners as the latter were mostly stationed out of Delhi and scheduling their meetings with DGRI and DG, GSTI often proved difficult.
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