Date: 31 July, 2023
In a recent ruling, the Supreme Court of India directed the reward committee constituted by the Ministry of Finance to review its decision on the amount of reward awarded to an individual who provided crucial information regarding tax evasion by the news agency M/s ANI Media Pvt Ltd.
The appellant, who had informed the authorities about the service tax evasion of Rs. 2.59 crores by M/s Asian News International (ANI) Media Pvt Ltd, claimed that the defaulter voluntarily paid the service tax dues upon receiving the information. However, the reward committee had sanctioned a final reward of only Rs. 5.50 Lakhs to the appellant, based on the information about the tax evasion.
The appellant contended that as per Clause 4.1 of the "Reward to Informers and Government Servants Review of Policy-Procedure and Guidelines” issued by the Ministry of Finance, the reward should have been up to 20% of the evaded amount, along with the fine and penalty levied. This would entitle him to a reward of Rs. 51.80 Lakhs, much higher than the amount granted.
Initially, the appellant had approached the Bombay High Court in 2015, seeking a review of the reward amount. However, the High Court ruled that the case involved disputed questions of fact, recommending the appellant to file a civil suit. Unsatisfied with this decision, the appellant later approached the Supreme Court.
Upon analyzing the case, the Supreme Court found that the reward committee had not applied its mind adequately while granting the reward. The Court emphasized that the decision-making authority must provide well-founded reasons for their conclusions. In this case, the minutes of the committee meeting revealed a lack of proper reasoning for awarding the appellant only Rs. 5.50 Lakhs instead of the entitled 20%.
The Court also noted that in 2018, the Additional Solicitor General had informed about an enhanced reward of Rs. 9.45 Lakhs, raising further doubts about the proper application of mind in the decision-making process.
Based on these observations, the Supreme Court partially allowed the appeal, directing the reward committee to reconsider the appellant's case and determine if a higher amount is payable to him. The Court reminded the committee that as per the policy, the reward should be up to 20% of the evaded amount, plus the fine and penalty imposed.
The committee has been given six months to reevaluate the case and make a fresh decision. The Court's ruling ensures that informers who expose tax evasion are adequately rewarded as per the established guidelines and principles.
Case title: Ketan Kantilal Modi v. Union of India| Civil Appeal (C) 12033 of 2018
Website designed, developed and maintained by webexy