2016 (4) TMI 240 - HC - Service Tax

Entitlement for balance reward as per reward circulars - On information of petitioner department came to know about the defaulter of service tax who then, voluntarily deposited his service tax dues for which petitioner needs to be rewarded claimed by petitioner - Petitioner s role has not been discussed and a quantum of reward has been determined unilaterally much below the prescribed limit of 50%, therefore, balance amount of the reward be directed to be paid - Held that - the reward disbursed to the petitioner till date is only an advance amount and not the final sum. The respondents are misleading this court and they ought to faithfully disclose that the petitioner is entitled to a sum of ₹ 51.87 lacs. The petitioner disputes the computation and submits that because of the nature of services offered by the assessee that he learnt about the service tax evasion. The assessee evaded service tax. The petitioner s information led to recovery of tax along with interest worth ₹ 2.5935 crores. The evaded tax was paid by the assessee voluntarily under the self assessment scheme and investigators had very little role in the recovery, which alone was enough to qualify and consider the petitioner eligible for full reward at the rate of 20%. Thus, how the reward amount is to be computed and whether the amount as computed by the respondents is in tune with the reward scheme or the circular in that behalf itself is a disputed question. Once the petitioner now and in the rejoinder affidavit seeks more details of the information already forwarded and tries to elaborate it with figures, particularly after enlisting the services provided by the assessee, then, all the more such a factual dispute can not be resolved. an elaborate exercise of arriving at the figures of the reward cannot be undertaken as it is not just on affidavits that the figures can be determined and correctly but the affidavit sets out versions of both sides. Which version is the correct one would have to be determined in appropriate proceedings. If the petitioner claims the sum under the head balance reward , then, whether that balance, as computed by the petitioner, is accurate or that there is no balance are matters which must be resolved by a competent Civil Court. It is not as if the petitioner is remedyless. Decided against the petitioner

Summary

Issues:
Petition for writ of mandamus for payment of balance reward claimed by petitioner based on information provided regarding tax evasion. Dispute over reward amount computation. Discrepancy between petitioner's claim of reward and amount sanctioned by Reward Committee. Disagreement on whether writ jurisdiction is appropriate for resolving factual disputes.

Analysis:
The petitioner filed a writ petition seeking a mandamus or direction for the respondents to pay a balance reward of ?46,37,000, claiming entitlement based on information provided leading to recovery of service tax dues by a tax defaulter. The petitioner relied on circulars outlining reward schemes and cited a Division Bench judgment to support the claim. However, the respondents, through an affidavit, disclosed that a Reward Committee had examined the information provided and sanctioned a reward of ?5.50 lacs, based on the tax evasion amount recovered. The petitioner contested this, arguing that the reward amount was unilaterally determined below the prescribed limit and sought the balance amount of ?51,80,000. The court noted the dispute over reward computation and the petitioner's refusal to provide specific figures of evasion, asserting that the authorities should calculate the reward based on the total evasion amount, not just the recoveries attributable to the information provided.

Upon reviewing the petition, reply affidavit, and rejoinder, the court found it unable to decide the disputed factual question regarding the reward amount. The petitioner claimed that the reward received was only an advance amount and disputed the computation, asserting eligibility for a higher sum. The court observed that determining the accurate reward amount involved complex factual considerations beyond the scope of writ jurisdiction. The court emphasized that the petitioner could pursue the matter through a civil suit for resolution. The court distinguished a previous Division Bench judgment, stating it was not applicable due to factual distinctions. Ultimately, the court dismissed the writ petition, citing the availability of an alternate and equally efficacious remedy through a civil suit, especially considering the disputed issue of claiming the balance reward after a significant lapse of time from the initial payment date.