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TMI Blog2024 (11) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... cheme. The informer s contribution is viewed in higher regard if it exposes individuals central to the evasion network, thus enhancing the impact of the enforcement action. Together, these factors illustrate that the reward is not a fixed proportion of the recovery but instead a careful determination based on the informer s input, the level of risk, and the practical outcomes of their information in recovering government dues and capturing the key players involved. Thus on a holistic reading of the Guidelines, it emerges that the Petitioner s claim of reward for 20 percent is not a matter of right which can be sought by invoking this Court s writ jurisdiction under Article 226 of the Constitution. Petitioner has already been awarded INR 25 lakhs by the Respondents. The appropriateness of this quantum of reward cannot be adjudicated by this Court in proceedings under Article 226 of the Constitution, since it involves substantial determinations as to how and to what extent was the information useful in apprehending the duty evasion and the key players in this regard. While the information provided by the Petitioner was useful in determining that there was an evasion of duty by the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontrary to the terms outlined in the guidelines. He asserts that, since the duty evasion by the Company was uncovered solely based on the information he provided, he has a legitimate expectation of receiving the full reward of 20 percent as specified. To support his claim, he places reliance on the revised Guidelines for grant of Reward to Informers and Government Servants [ Guidelines ] , specifically invoking Clause 5.1.1., which reads as under: 5. QUANTUM AND CEILING OF REWARDS:- 5.1.1 Informers and Government Servants will be eligible for reward upto 20% of the net sale-proceeds of the contraband goods seized (except items listed in Para 5.2 below) and/or amount of duty/ Service Tax evaded plus amount of fine and penalty levied/ imposed and recovered. 4. The Petitioner further contends that the Respondents decision to disburse only a fraction of the claimed reward violates his right to equal treatment under Article 14 of the Constitution of India. He also argues that the Respondents ought not to have made the decision without affording him an opportunity for a personal hearing, thus violating the principles of natural justice. He emphasizes that such a hearing was essential to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts/evasion of duty/service tax, special initiative, efforts and skills/ingenuity displayed leading to the recovery of Government dues during the course of investigation, admitting their liability by way of voluntary deposit and whether, besides the seizure of contraband goods/detection of infringements/evasion of duty/ service tax, the owners/organisers/financiers/racketeers as well as the carriers have been apprehended or not. The reward has to be case specific and not to be extended, in respect of other cases made elsewhere against other parties on the basis of a similar modus operandi. However, the Government Servants will be entitled to reward as per the normal guidelines when they book a case in their jurisdiction on the basis of modus operandi circulars issued by the Board/DRI/DGCEI 8. The aforenoted clause provides a discretionary framework permitting the competent authority to evaluate the unique aspects of each case rather than conferring a prescriptive or automatic entitlement to a fixed percentage of the recovery. Under Clause 3.3.1 of the guidelines, an informer s eligibility for a reward is not a routine entitlement but is instead based on a comprehensive assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court judgement of M.K. Govindapillai v. Secretary, Central Board of Excise , which is relied upon by the Petitioner is inapplicable to the present case. In Govindapillai, the petitioner sought a higher reward after his tip led to a substantial seizure of contraband gold and watches. While a provisional reward was initially granted, authorities later denied an increase, citing minor inaccuracies in the information namely, a discrepancy in the vessel s name. The High Court ultimately ruled in the Petitioner s favour, holding that the Department s refusal based on a minor inaccuracy was arbitrary and overlooked the substantial value of the information. The Court directed a re-evaluation of the reward, emphasizing that the discretion vested in the authorities must be exercised fairly and without undue reliance on hyper-technical details. However, we must note that in the later judgments, the Supreme Court in Union of India v. R. Padmanabhan and Union of India Ors. v. C. Krishna Reddy has held that rewards for informers are inherently discretionary and do not constitute enforceable rights. These judgments clarify that the competent authority retains complete discretion under the guid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be adjudicated by this Court in proceedings under Article 226 of the Constitution, since it involves substantial determinations as to how and to what extent was the information useful in apprehending the duty evasion and the key players in this regard. Furthermore, it must be noted that while the information provided by the Petitioner was useful in determining that there was an evasion of duty by the company, the matter was eventually settled between the Respondents and the defaulting company under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. Thus, there is nothing on record to show that the discretion exercised by the Respondents has been manifestly arbitrary. 13. Lastly, the Petitioner s contention that he was entitled to a personal hearing before the authorities, before the determination of his reward, is misconceived. The guidelines do not impose any such procedural requirement. As the reward scheme is discretionary and ex-gratia, the competent authority is not bound to give personal hearing. Ex-gratia payments do not necessitate the procedural formalities associated with legally binding rights, as they are governed by principles of administrative discreti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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