Informers who take risks to provide information about tax evaders must be rewarded fairly: HC

Time of India

6 hours ago

Mumbai: Informers who take risks to provide credible information to government authorities based on which tax evaders are brought to book should be rewarded fairly as per the government scheme, the Bombay High Court said on Tuesday.
A bench of Justices M S Sonak and Jitendra Jain ordered the Maharashtra government to pay an interim reward of Rs 19 lakh to a 76-year-old man who had been providing information about sales tax evaders since 1992.
It directed the government to determine the exact reward payable to the petitioner, Darshan Singh Parmar, within six months. Parmar, in his plea, said that he had provided valuable information to the state government and the sales tax department since 1992, based on which recoveries were made from tax evaders.
The court pulled up the authorities for wasting the petitioner's and the court's time by not precisely informing about the amount payable as reward and the recoveries made based on Parmar's information.
Once the government formulates a reward scheme, it should be operated fairly and squarely, the bench said. "Informers, based on whose information tax evaders are brought to book and taxes recovered, should not be made to run from pillar to post or otherwise suffer frustration," it held.
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The court said that informers who take risks and invest time should not be made to run from pillar to post to secure what may be due and payable. There must be no unreasonable delay in paying the determined reward amounts, and the practice of raising frivolous and belated objections only to avoid legitimate payments must also be eschewed, it said. Parmar, in his plea, claimed that for no apparent reason, he had not been receiving rewards.
The bench noted that in 2015, the authorities determined a certain amount payable to Parmar as reward, but since it exceeded Rs 5 lakh, the state government's sanction was required for payment. The bench remarked that despite several orders passed by the high court in the past, the authorities were neither serious about recovering the dues from the tax evaders nor determining the reward amount payable to Parmar.
"The respondents have consistently been uncooperative in providing the necessary details, solely to delay the payment indefinitely," the court said.
In 2024, the joint commissioner of sales tax said that Rs 19 lakh was payable to Parmar as reward. Parmar, however, said this amount was too low and that he deserved more.
The bench stated that it was unable to establish the exact amount of the reward due to Parmar at this stage. It directed the government to pay Rs 19 lakh within six weeks and to determine the exact amount payable to Parmar within six months. The sales tax commissioner and the state finance secretary must, within six months, determine the precise amount of reward payable to the petitioner and pay the same within two months thereafter, the court ordered