Reward For Informer Reporting GST Evasion Discretionary, Cannot Be Claimed As Right: Delhi High Court
The Delhi High Court was considering a Writ Petition filed on the ground that Petitioner was not considered for the grant of reward in terms of Notification issued by the Central Board of Excise and Customs (Anti Smuggling Unit).
The Delhi High Court has held that grant of an award/ reward to an informer of GST evasion is a discretionary grant and cannot be claimed as a right.
The Court was considering a Writ Petition filed on the ground that Petitioner was not considered for the grant of reward in terms of Notification issued by the Central Board of Excise and Customs (Anti Smuggling Unit).
The bench of Justice Pratibha M. Singh observed, ".....In the opinion of this Court, the grant of an award or a reward to an informer is a discretionary grant and prima facie, the Petitioner is not entitled to challenge the order-in-appeal, since the status of the Petitioner is that of an informer. Such a person cannot create a lison the ground of claiming of an award and contest the private Respondent on merits."
The Petitioner was represented by Advocate Kumar Utkarsh while the Respondent was represented by Advocate Gaurav Sharma.
The case of the Petitioner was that she had provided information with respect to the wrongdoings and evasion of GST by one M/s Shakti Enterprises. Thereafter, a show cause notice was initially issued to the said entity which culminated in an order raising a substantial demand and further penalties were also imposed.
However, in an Appeal, the decision was modified and penalties raised against the partners of M/s Shakti Enterprises were set aside along with some of the tax demands. Thereafter, only some small demands have been finally raised in the order-in-appeal The Petitioner, being an informer in the proceedings is aggrieved by it.
The Court queried the Counsel for the Petitioner as to how the petition would be maintainable, as no right can be claimed by an individual to be given an award or a reward who pointed out that there is a list of a large number of clients of M/s Shakti Enterprises who had deposited TDS and the taxable value has been wrongly taken by the Department, hence leading to a small demand being raised in the order-in-appeal.
On the other hand, Counsel for the Department relied on the decision of the Supreme Court in Union of India & Ors. v. C Krishna Reddy (2003) to argue that a writ of mandamus cannot be issued at the behest of an informer.
The Court asked for the presence of the informer in court and posted the matter for next hearing on December 18, 2025.
Cause Title: XY v. Union of India & Ors.
Appearances:
Petitioner- Advocate Kumar Utkarsh
Respondent- Advocate Gaurav Sharma, Advocate Manpreet Kour, Senior Standing Counsel Samiksha Godiyal, Advocate Tenzing N Bhutia, Advocate BD Rao Kundan
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