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TMI Blog2018 (3) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner is that he has been instrumental in forwarding, at the risk of his life and that of the members of his family, information which is indeed valuable and crucial. The petitioner spent his own money and took great pains to gather such information. The petitioner has pointed out that there are e-commerce companies indulging in huge evasion of duties and violation of laws made by the Parliament. All the respondents before this Court are the Officers of a Directorate styled as Directorate of Revenue Intelligence ('DRI' for short). The petitioner kept a very close watch on the activities of these ecommerce companies. He found that one M/s. ICC Worldwide Pvt. Ltd. was the major tax evader. The petitioner then obtained certain information about its activities and the modus operandi evolved so as to evade the taxes. The petitioner contacted and met the 2nd respondent Mr. P. K. Dash then Additional Director General of Revenue and informed him so also explained the information regarding misuse of concessions given to such entities in the form of customs duty, how this major tax evader in the garb of obtaining such concessions has indulged in smuggling and anti national activit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Raghavendra is assigned by him to look into this information and further investigations. Therefore, now the details and information should be provided in relation to the above entity to Mr. Raghavendra. Mr. Dash is supposed to have told the petitioner that he trusts Mr. Raghavendra and the petitioner should also trust him. The petitioner claims to have agreed to this advice and directions of Mr. Dash. The said Mr. Dash also added to the duties of Mr. Raghavendra as he was earlier posted at courier clearance cell at International Airport at Mumbai. The petitioner was introduced by Mr. Raghavendra to the 4th Respondent Mr. Sushil Chandra. The petitioner was informed that he should trust this gentleman as well. Thus the petitioner shared the information details with these persons. They seem to have been connected with each other on the whatsapp group. The petitioner relies upon the e-mail correspondence of January 2015 and the text of the confirmation receipt of these messages. Thus the 1st respondent commenced the investigation based on this information and raised the demand on the said M/s. ICC Worldwide Pvt. Ltd. in the sum of Rs. 6 Crores. 6] Annexure 'A' to the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f DRI has successfully booked a case against M/s.ICC Worldwide Pvt. Ltd. on the basis of the information provided by him, for recovery of government revenue (Duty) to the tune of about Rs. 6 Crores (Rupees Six Crores) (approximately). Petitioner was flabbergasted to hear this because, as per the intelligence and information gathered by the Petitioner, this amount should have been several times more than what has been demanded. Petitioner says that inspite of providing detailed and precise information to the department and the volume of evasion was so high, the investigation has not been conducted properly and the evasion of duty was too much high and the duty demand being made by the department from M/s. ICC Worldwide Pvt. Ltd. is on a far lower side than what it should have been as per the information. Petitioner strongly feels that some keys aspects must have been missed out in the investigation for the reason unknown to him. Petitioner in fact had also informed that M/s. ICC Worldwide Pvt. Ltd. and group had sold more than 1 lac expensive re-furbished mobile phones (which is restricted item for import) and around 30,000 I-pads on e-bay platform which is easily verifiable by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serted that the record with the department would reveal that the information / intelligence was gathered by its own sources and particularly on the inputs by the agencies of the Government of India much prior to the claim of the petitioner having forwarded informally some information in the case to the officers of the DRI. Since the records pertain to the development of intelligence, it will not be appropriate or advisable to make the same public but they can be produced by the respondents for perusal of this court. Thus, the DRI did not act on the information provided by any informer. There is no record available of any informer interested in reward forwarding the details and inputs based on which the investigations were commenced by the DRI and the assessee was booked. 15] One person claiming to have some information on the activities of M/s. ICC Worldwide Pvt. Ltd. had met respondent no. 3 on being referred by respondent no.2 some time in the month of January 2015 for discussing the alleged irregularity in courier clearances. The respondent no. 3 had met the petitioner close to three times in the office of the DRI. The petitioner claimed clandestine removal of consignments and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lying on the so-called information provided by the petitioner. It is in this background that the introduction of the officers to the petitioner may not be denied but the respondents asserted that they probed the deals and investigation was at fairly advanced stage. The petitioner did not provide any assistance based on which he could claim reward. For professional and ethical reasons the intelligence development was not shared with the petitioner. The requirement of secrecy and which overrides the personal interest of the petitioner demanded that the petitioner should not be revealed the information gathered by the revenue officials much less sharing its details with him. 18] In substantiating this assertion, the department in paragraph 11 of this affidavit in reply relies on the information obtained by the Central Bureau of Investigation (CBI) from an anonymous source about irregular activities of M/s. ICC Worldwide Pvt. Ltd. This information was forwarded to the DRI through the departmental route, for necessary action. This information was received by an agency of the Government of India without any claim of reward and long before the petitioner could contact the revenue officia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uly 2016 is issued to the defaulter on the information provided by the petitioner in January 2015, now, it is conveniently denied. Surprisingly the petitioner seems to have been following up the matter and equally vigorously with the defaulter for the petitioner's information that the intermediate duty has been recovered from the year 2010. The tax evasion has been admitted by the tax defaulter and after making payment it has approached the Settlement Commission to settle the issue and avoid prosecution. This seems to be a pointer to the role of the petitioner and those befriended by him as such revelations are not forthcoming even from the respondents. 22] We have reproduced relevant statements in the affidavit in reply and the denials in rejoinder for the petitioner is now claiming to be more than a mere informer. He is claiming to be instrumental in bringing the guilty tax evader to book and it is only his information on the activities of the defaulter which has led to the issuance of the show cause notice and is thus the foundation for issuance of the same. If the foundation of the allegations in the show cause notice is this information provided by the petitioner then he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial that we have heard Mr. R. V. Desai, learned senior counsel appearing for the petitioner. 28] Mr. Desai would submit that we must not allow the respondents to deny the petitioner the reward. Our attention has been invited to whatsapp messages by Mr. Desai, some of which he read out in great details. He submitted that every single piece of information provided by the petitioner is the sole basis for issuance of show cause notices or taking action against the tax evader. Now it is very convenient for the revenue officials to deprive the petitioner of a reward. Thus, this is contrary to the express terms of the reward policy. 29] It is stated that the petitioner's efforts should have been properly rewarded. If the department is now allowed to argue and contrary to its own reward scheme, that will be discouraging public spirited citizens and genuine persons like the petitioner who assist the departmental officials in unearthing frauds or evasion of taxes. 30] Mr. Desai has submitted that the impugned communication, copy of which is at page 81 of the paper book, is unreasoned and defeats the principles of natural justice. It is nothing but a non speaking order. The scheme of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n passed in writ petitions seeking reward and which have laid down the procedure. In countering Mr. Desai submissions, Mr. Jetly submits that the reward to informers is an absolute discretion of the competent authority. The reward cannot be claimed as a matter of right. Its grant is ex-gratia subject to guidelines. Therefore specific and accurate information, risk undertaken, extent and nature of help rendered by informer, difficulty in securing information are some of the relevant factors based on which a decision is taken to grant reward. Once merely correspondence with the department does not confer any right, then, the department cannot be directed to consider the case of the petitioner. It is also the submission of Mr. Jetly that in writ jurisdiction we cannot enter into a disputed territory and hold that the reward was due and payable or otherwise. Meaning thereby if the reward seeker has not been found to be forwarding specific and accurate information based on which any action is taken against the defaulter or evader, then, the department's assessment or judgment of this nature is not liable to be interfered with in writ jurisdiction. For all these reasons, he would sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies such as CBI would act swiftly thereby jeopardizing the interest of the petitioner. The case of the petitioner was only to seek a reward and in money. This generally does not seem to be a genuine and bonafide act to protect the larger public interest or block revenue leakages. Then the petitioner says that the clearing person of the company is going to clear the import and export cargo in the night of 28th January 2015 at about 2.30 a.m. he will let the department officials know as soon as he gets the signal from his source that the subject company has filed bill of entry in Form IV and the cargo is of e-Bay. He will let know the bill of entry number and the department should put it on hold. He requests not to do any enquiry in this regard till then as the tax evaders have their own settings. We do not know what does this mean. But the petitioner once again says that he has his own source which can be approached for the activities of the tax evader. He repeatedly says that do not make any clearance. This goes on in the entire month of January 2015 and February 2015 and with reference to Mr. Arjun Raghavendra's name in this whatsapp messages that the petitioner is supposed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is peanuts and it should have been much more. The amount to be recovered is huge and he says that he was hopeful that nothing has been missed in the investigation. The petitioner thus says that he should be given an advance reward at the earliest and he is still ready to provide further inputs to fetch more revenue in this case. 36] We do not know how therefore in the earlier paragraphs, the petitioner claims that a case has been booked on the basis of specific and elaborate information provided by him but the amount of deposit is just a peanut. The tax evader should have deposited much more and the petitioner hopes that the investigation has not missed out anything. Then he says that he is entitled to an advance reward but he will forward further emails to DRI to fetch more revenue in this case. 37] If the case was fully investigated, show cause notice was issued then we do not see how on 15th December 2015 the petitioner addressed a communication of this nature. He knows that the investigations were on. He knew that the investigations resulted in booking the concerned tax evader but at a later date. The petitioner complained to the Prime Minister's office on the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or reward are looked into, considered and reviewed from time to time. Though the essential scheme without fundamental changes, is the same in tune with the various recommendations and changing scenario of smuggling and commercial frauds, certain modifications have been considered necessary. Therefore specific guidelines / procedure have been evolved in dealing with reward. A eligible government servant is one part of the policy / guidelines. Then what we find is the stipulation and which is equally applicable to all, namely, the government servants and informers. Paragraph 5.1 of the guidelines reads as under: "5.1 Reward is purely an ex gratia payment which, subject to guidelines, may be granted on the absolute discretion of the authority competent to grant rewards and cannot be claimed by anyone as a matter of right. In determining the reward which may be granted, the authority competent to grant reward will keep in mind the specificity and accuracy of the information, the risk and trouble undertaken, the extent and nature of the help rendered by the informer, whether information gives clues to persons involved in smuggling, or their associates etc, the risk involved for the Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied on the information or the details provided by the petitioner. It specifically denies that it has so relied on the same. It says that it has its own sources to obtain information and its own intelligence generated led to investigations being carried out much prior to the petitioner coming on the scene. The petitioner came on the scene on January 2015 and the department claims to have obtained the information in April 2014 and in relation to certain transactions by the courier mode. Thus the petitioner has occasion of obtaining these details of the information collected and generated by the department from his own sources and encashing upon the same. The petitioner is accused of having relied on this very piece of information available with the department but without its details and he commenced correspondence in January 2015. He commenced correspondence about those cases which were already under the scanner of the department. The department had an in-house investigation mechanism and which it resorted to. It did not rely on the information made available by the petitioner. The petitioner's emails did not gave the details as were necessary and that is why the respondents have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther sum. However the matter was left open because Directorate of Vigilance was conducting enquiry. Once that investigation was over, the meeting of the reward committee was convened for considering the final reward to the informer or otherwise. Once this balance amount was not released and the claim was rejected only on the principle that this is not an absolute right that the Division Bench held and relying on the decision of the Supreme Court in the case of Union of India vs. C. Krishna Reddy 2004 (163) E.L.T. 4 that the petitioner had provided a specific information pertaining to five containers which were lying in the Port and based on the information seizure was effected. The show cause notice also in unequivocal terms mentions about the specific information raised by the officers of the Central Intelligence Unit. The seizure was effected, the advance reward was released in the sum of Rs. 5 lakhs and that is how this Court did not uphold the stand of the Revenue that the petitioner was disentitled to the reward or the balance amount. There was no dispute of the nature brought before us. In our case even the initial entitlement or an advance reward is disputed and that was n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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