Informer Demands Full Reward in Rs 23 Crore Tax Evasion Case, HC Issues Notice
Mumbai, 23rd February 2025: The Bombay High Court has issued a notice to the Central government in response to a petition filed by a whistleblower who claims he was shortchanged on his reward for exposing a tax evasion case worth over ₹23 crore.
The petitioner, identified as XYZ, alleged that despite providing crucial information leading to the recovery of the evaded taxes, he was awarded only ₹25 lakh—far less than the 20% share he believes he is entitled to, which amounts to approximately ₹4.73 crore.
A bench comprising Justices Revati Mohite Dere and Neela Gokhale took up the case on Friday. The informer stated in his plea that in September 2013, he tipped off the Directorate General of Central Excise Intelligence (DGCEI), now known as the Directorate General of Goods and Services Tax Intelligence (DGGSTI), about a company evading excise duties on insecticides and related products. Following an investigation in July 2014, authorities uncovered tax evasion involving central excise, customs duties, and service tax, leading to a total recovery of ₹30.58 crore, including ₹6.9 crore in interest.
Despite his pivotal role in the case, the petitioner contends that the reward was disbursed in an “opaque manner” in March 2022, without justification on how the amount was determined. His requests for a reassessment of the reward were allegedly ignored, prompting him to move the High Court in May 2024.
The petition cites the Finance Ministry’s July 2015 revised Guidelines for Grant of Reward to Informers and Government Servants, which allow whistleblowers to receive up to 20% of the recovered amount, including penalties and fines. The petitioner argues that, based on this provision, he should have received ₹4.73 crore from the ₹23.6 crore recovered.
“Instead, the authorities awarded me a mere ₹25 lakh, which is barely 1% of the entitled amount,” the petition states.
Taking cognizance of the matter, the High Court has sought a response from the Central government and scheduled the next hearing for March 20.
