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Informist, Tuesday, Jun. 24, 2025

 

NEW DELHI – Ordering the tax department to reward an informant who provided valuable information that helped in effecting tax recoveries, the Bombay High Court Tuesday said if the government has formulated a scheme of reward, it must be implemented fairly and transparently. Informers who take risks and invest their time must not be made to run from pillar to post to secure what is due to them, it said. There must be no unreasonable delay in paying the determined reward amounts, and the practice of raising frivolous objections to avoid legitimate payments must be eschewed, it added.

 

A division bench of the high court comprising Justice M.S. Sonak and Justice Jitendra Jain directed the tax department to pay INR 1.9 million to Darshan Singh Parmar, the informant, within six weeks from the date of the order. If the payment is not made within this period, the department will also have to pay interest on the amount at the rate of 8% per annum, the bench said.

 

As Parmar had said a higher amount was payable, the bench also directed the sales tax commissioner, Mumbai, and the finance secretary, state of Maharashtra, to determine within six months the precise amount payable to him and, upon such determination, ensure the payment is made within two months thereafter.

 

From the various affidavits filed by the tax department in connection with the petition, the Bombay high court said it was "more than satisfied" that the department did not wish to comply with its own 1976 circular regarding payment of rewards to informants. Even after accepting the department's contention that the revenue must be "irrevocably" realised, some reward is still due to the petitioner, the court said, adding that the department was well aware of this and had wasted considerable time by not precisely informing the court of the number of recoveries made irrevocably.

 

The court was hearing a petition by Parmar seeking direction to the tax department to reward him for valuable information provided to the state government and its sales tax department since 1992, based upon which recoveries were made from tax evaders. In 1996, Parmar had revealed the connection between public-sector oil marketing companies and certain fishermen's co-operative societies and their modus operandi that resulted in widespread tax evasion. Despite Parmar giving information that at least on the face of it indicated tax evasion and even fraud, the department took no action to reward him.  End

 

Reported by Surya Tripathi

Edited by Rajeev Pai

 

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