Darshan Singh Parmar v. The Union of India & Ors.

14. Para-8 of the Affidavit dated 21 September 2015, which we have transcribed above, indicates that by communication dated 07 September 2015, a certain amount payable to the Petitioner as a reward was determined. However, since the said amount exceeded Rs. 5 lakhs, the sanction of the State Government was required for its payment.

15. On 26 August 2014, this Court (Coram: S.C. Dharmadhikari and A.K.Menon, JJ), after perusing Affidavits filed until then, required the learned AGP to obtain instructions from the Respondents about the requisite steps to recover the outstanding dues so that the quantum of reward to the Petitioner would be determined and paid. This is because, on the one hand, the Respondents were not paying the reward amount on the grounds that the revenue had not been recovered, and on the other hand, the authorities were taking no steps to recover the revenue from the evaders.

16. On 28 October 2014, this Court (Coram: S.C. Dharmadhikari and A.A.Sayed, JJ) made another order requiring the Respondents to refrain from not just tendering charts across the Bar but filing Affidavits to support and substantiate such figures. The Commissioner of Sales Tax or the Joint Commissioner was directed to file an Affidavit regarding the steps to recover the dues to the Government. The Court noted that if the dues to the Government were to the tune of crores of rupees, then the Affidavit should explain why no steps were taken for the recoveries. The Affidavit was also directed to disclose the steps the State proposes to take against erring officials in the Department.

17. The Affidavit filed by Mr. Tukaram Mundhe, the Joint Commissioner of Sales Tax, was taken on record by the order dated 11 November 2014. In the context of this Affidavit, this Court (Coram: S.C. Dharmadhikari and A.A.Sayed, JJ) made a detailed order on 18 November 2014. In this order, this Court noted the statement of the Joint Commissioner of Sales Tax that the Department will endeavour to recover the entire amount on or before 31 March 2015 or even earlier. This assurance was accepted as an undertaking to this Court.

18. On 20 January 2015, this Court (Coram: S.C.Dharmadhikari and S.P.Deshmukh, JJ) made the following order:-

19. On 04 February 2015, this Court (Coram: S.C.Dharmadhikari and N.W.Sambre, JJ) passed the following order:- “Mr Sonpal assures the Court after taking instructions from the Commissioner that the file containing the request of the petitioner for a reward will be processed and a decision will be taken thereon as expeditiously as possible and on or before 6th April,

2015. List on 17th April, 2015.”

20. Despite all the above orders, this Court found that the Respondents were neither serious about recovering the dues from the tax evaders nor informing the Court or determining the reward amount payable to the Petitioner in terms of the Government Circular/Resolution.

21. Therefore, on 28 April 2015, this Court [Coram: B.R.Gavai, as his lordship then was, and A.S.Gadkari, JJ) made the following order:- “ The petitioner has approached this Court praying for a Writ directing the Respondent to pay the reward money to the petitioner in accordance with the Circular, which is annexed to the petition.

2. It is the contention of the petitioner that the petitioner is a vigilant citizen and as such had brought to the notice of the Respondent-Authority, the huge tax evasion by various Public Sector oil companies. It is the contention of the petitioner that, in accordance with the Scheme framed by the State Government, that the petitioner was entitled to an amount of Rs.9,02,50,000/- as a reward on the basis of the huge recovery of taxes made by the Government on the basis of the information given by the petitioner.

3. It appears that various orders have been passed by this Court from time to time. Shri Sonpal, learned counsel appearing on behalf of the Revenue has placed an order dated 10th April, 2015 by which the State Government has sanctioned to pay an amount of Rs.75,000/- to the petitioner as an interim measure.

4. A Division Bench of this Court at Nagpur Bench (to which one of us i.e. B.R.Gavai, J. is a party) recently had an occasion to consider similar issue in Public Interest Litigation No. 99 of 2014 (Lalan Kishor Singh vs. State of Maharashtra & Anr) decided on 9.3.2015. We have categorically observed that if the Department initially gives an impression to the citizens that upon receipt of the information from them, tax recovery is made, then in that event, a part of that recovery would be paid to such citizen as a reward and subsequently does not abide by the representation and pay the amount of reward, such a conduct would be against the interest of Revenue itself.

5. We had categorically observed that if the citizens who acting on the representation made by the Government, give some valuable information and upon receipt of such information the tax recoveries are made and subsequently, the citizens are made to run from pillar to post for getting such reward, citizens would lose faith in the system and would not come forward to give the information. We have further observed that this would result in a loss to the Public Exchequer.

6. Though in the present case, Mr. Sonpal submits that entire recovery is not on account of the information given by the petitioner, but has fairly admitted that part of the recovery is on the basis of the information given by the petitioner.

7. If that be so, the Respondent-Authorities can very well determine as to what percentage of the total recovery is attributable to the information received from the petitioner. If that determination is made, a determination as to how much amount the petitioner is entitled to in accordance with the Scheme framed by the Government can be easily made.

8. We, therefore, direct the Respondent- Authorities to do the determination as directed hereinabove and place the same on affidavit before this Court by the next date. Stand over to 21st July, 2015.”

22. The rule was issued in this Petition on 13 October 2015. This Court clarified that if any ad-hoc or provisional determination has been made or any amount fixed by the Respondent, the same would be paid over to the Petitioner, who shall accept it under protest and without prejudice to his rights and contentions in the Petition. In the meantime, the Petitioner filed Contempt Petition No. 28 of 2018, alleging non-compliance with the orders issued by this Court from time to time in this Petition. Ms. Shaila A, Joint Commissioner of State Tax (INV-B), filed a very vague Affidavit on 21 September 2018 claiming compliance.

23. Despite all the above orders, no payment was made to the Petitioner. This Petition was dismissed for non-prosecution on 12 July 2024, but it was later duly restored.

24. On 20 December 2024, after taking cognisance of the communication dated 04 October 2024, which Mr. Takke produced, the learned AGP, this Bench made the following order:- “1. Heard learned Counsel for the parties.

2. Mr Takke, learned AGP places on record the communication dated 4 October 2024 which suggests that the Petitioner is held eligible and admissible to reward amount of Rs 19,44,802/-. He points out that since the reward amount exceeds Rs 5 Lakhs, the competent authority for sanction is the government. He states that within a reasonable time, the government will decide the issue.

3. Learned Counsel for the Petitioner points out that this reward amount concerns only one of the oil companies. He also points out the additional reward is due to the Petitioner.

4. At this stage, we are not deciding or disposing of the matter finally. All such issues can therefore be raised on the next date.

5. For the present, we are interested in ensuring that at least the admitted amounts are paid to the Petitioner at the earliest.

6. Therefore, we list this matter on 7 February 2025 for directions. We expect that by end of January at least, necessary orders and payments are made to the Petitioner.

25. In the context of this Court’s order dated 20 December 2024 and the communication dated 04 October 2024, Mr. Shanmugarajan S., Joint Commissioner of State Tax (Investigation-B), Mumbai, has filed an Affidavit on 21 March

2025. After all these years, the defence now taken is that the Petitioner, while furnishing information about tax evaders, had not submitted a statement in Form-A. On this ground, it was suggested that no reward would be payable to the Petitioner, even though, the quantum of such reward was reflected in the communication dated 04 October 2024.

26. From the various Affidavits filed in this Petition, we are more than satisfied that the Respondents do not wish to comply with their own Circular/Resolution regarding the payment of reward to the Petitioner. Even after accepting the Respondents’ contentions that the revenue must be irrevocably realised, some reward is still due and payable to the Petitioner. The Respondents are aware of this, and therefore, considerable time was wasted by not precisely informing the Court of the number of recoveries made irrevocably. In the communications dated 7 September 2015 and 4 October 2024, a determination was made, as a result of which, the Joint Commissioner of Sales Tax decided that an amount of Rs. 19,44,802/- was payable as a reward to the Petitioner. However, this communication, issued with the appropriate approval of the Commissioner of Sales Tax, Maharashtra, stated that since the reward amount exceeds Rs. 5 lakhs, Government sanction was required. As no decision was taken on the Government sanction, we were compelled to issue the order dated 20 December 2024.

27. The communication dated 04 October 2024 reads as follows: Office of the Joint Commissioner of State Tax, Investigation Branch-B Mumbai. 3rd Floor, ‘C’ Wing, Old Bldg., GST Bhavan, Mazgaon, Mumbai – 400 010. To, The Additional Chief Secretary, Finance Department, Mantralay, Mumbai. No. JC/Inv-B/2024-25/Shri. Parmar/Reward/B-50, Mumbai. Date 04/10/2024. Subject: Reward calculation of Mr. Darshan Singh Parmar Reference: Bombay High Court Order dated 28.04.2015 in case of Writ Petition 2283 of 2013. Sir, In the Writ Petition filed by Mr. Darshan Singh Parmar for reward due to the information of tax evasion supplied by him, Hon’ble High Court has directed to determine as to how much amount the petitioner is entitled to in accordance with the Scheme famed by the Government. The Department of Sales Tax had acted on the information given by the petitioner and on the basis of the assessment orders passed by the Department additional revenue attributed to information given by him is to the tune of Rs. 22,86,14,128/-. Calculation of the tax recovery is based on the information given by Mr. Darshan Singh Parmar in his complaint about the transactions between M/s Indian Oil Corporation and some Machhimar societies named in the complaint. The recovery of pending dues has been done as per Amnesty scheme 2019, and dues of Rs. 12,93,07,064/have been recovered irrevocably. The reward is calculated as directed by the Court and can be awarded now as the dues have been recovered irrevocably. Calculation of the reward is done as per GR No.STA- 2004/CR-103/ Taxation-2 Date 05.06.2007. The relevant paras of the GR dated 05.06.2007 for reward read as below: Sr. No Amount of additional tax realised Maximum Quantum of reward to the informant

1 Upto Rs. 20 lakh 10% of the additional tax recovered 2 Exceeds Rs. 20 lakh upto Rs.[1] crore Rs. 2 lakh + 5% of additional tax realised above Rs. 20 lakh.

4 Exceeds Rs. 10 crore Rs. 24 lakhs + 1% of additional tax recovered over Rs. 10 crore, subject to a maximum of Rs. 50 lakh. Sr. No Accuracy of information Percentages of total computed reward admissible to the informant

3 Generally correct but not so comprehensive 50% Based on the tax recovery computation of quantum of reward eligible and admissible to the informant is as below: (In Rs.) Tax demand raised attributable to the information given by the petitioner 25,86,14,128 Tax recovery under Amnesty Scheme-2019 12,93,07,064/- Slab Upto Rs. 10 Cr. 24,00,000/- Additional tax exceeding Rs. 10Cr. is 2,93,07,064/- @ 1% 2,93,070/- Total admissible reward 26,93,070/- 75% of total computed reward admissible to the informant. 20,19,802/- (-) Interim Reward already granted on 07.05.2015 75,000/- Balance amount of reward admissible 19,44,802/- As the amount of the reward exceeds Rs. 5 lakh, the competent authority to sanction the reward is the Government. Therefore the quantification of the award be approved so that the same can be granted to the informer. (With prior approval of Hon. Commissioner of State Tax, Maharashtra) Regards, (Vanmathi C.) Joint Commissioner of State Tax, Investigation Branch-B, Mumbai.

28. The Petitioner claims that a much larger amount is payable to him towards a reward. At this stage, based on the scant material placed on record by the parties, it would not be possible for us to determine this amount in this Petition. However, we cannot appreciate the difficulties the Respondents are imposing on the Petitioner in paying the amounts that they have themselves determined to be due and payable to the Petitioner. Once the Government formulates a reward scheme, it should be operated fairly and squarely. The 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.

29. At least after the determination reflected in the communication dated 4 October 2024 and the numerous orders made in this Petition, we expected immediate sanction for the release of the determined amount to the Petitioner. Instead of granting sanction, the Government’s Affidavit points out that the Petitioner had not provided information in the prescribed Form–A and therefore, no reward amount was payable. Factually, the information was provided in Form-A, and this form is also appended to the Petition. Mr. Shanmugarajan S., Joint Commissioner of State Tax, without bothering to read the Petition or take cognisance of its annexures, had filed an Affidavit only to unfairly deny the petitioner’s reward amount of Rs. 19,44,802/-, as determined by the officials based on the records.

30. Apart from the above glaring error, we note that from 2013 onwards, the defence that information was not supplied in the prescribed Form-A was never raised. The only defences, as noted above, were that no reward is payable unless the revenue is irrevocably realised. It was pointed out that the recoveries were subject matters of appeals etc, and until all these were disposed of, no reward could be paid. After these issues were sorted out and even the reward amount was determined, this latest defence has been raised without verifying the records or factual position.

31. According to the Petitioner, the reward amount, as determined by the Respondents, is too low, and a significantly higher sum is owed and payable. Currently, we are unable to establish the exact amount of the reward due to the Petitioner. The Respondents have consistently been uncooperative in providing the necessary details, solely to delay the payment indefinitely. In any case, the officers of the Respondents, of the rank of Joint Commissioner and with the approval of the Commissioner of Sales Tax, Maharashtra, have decided that Rs.19,44,802/- is presently payable to the Petitioner as a reward. This amount should have been paid to the Petitioner immediately. There is no basis for the Respondents to now retract and refuse payment of even this amount, which has been determined by them. This sum accounts for some modest amounts already paid to the Petitioner.

32. Therefore, we direct the Respondents to pay Rs. 19,44,802/- to the Petitioner within six weeks from the date this order is uploaded. If the payment is not made within this period, it will accrue interest at 8% per annum. The Respondents must pay this interest, but it should be recovered from the officers responsible for the delay. The Finance Secretary, after paying the interest, if necessary, must conduct an inquiry to identify the officers responsible and recover the interest from them. This is to ensure that taxpayers are not burdened with the delay caused by officers' lethargy in complying with the Court’s orders.

33. The Sales Tax Commissioner and the Finance Secretary, State of Maharashtra, must, within six months from today, determine the precise amount of rewards payable to the Petitioner and, upon such determination, pay the reward amount to the Petitioner within two months. The Sales Tax Commissioner and the Finance Secretary must supply the Petitioner with full particulars of the recoveries made, the status of pending appeals, etc., and hear the Petitioner, and consider all the documents produced by him. The Sales Tax Commissioner and the Finance Secretary must also examine all records, as we have noted that full particulars are not being supplied to either the Petitioner or this Court, but rather to delay the payment of the reward to the Petitioner. If the Government has formulated a reward scheme, it must be implemented fairly and transparently. Informers who take risks and invest time must 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.

34. The Petitioner, as clarified in our previous orders, may accept the amount of Rs. 19,44,802/- or such further amounts as may be determined and paid by the Respondents to him under protest, without prejudice to his contentions. For the balance, the Petitioner can file appropriate proceedings under the law.

35. The rule in this Petition is made partly absolute and disposed of in the above terms without any cost orders. Interim Application (L) No.13522 of 2024 does not survive and the same is accordingly disposed of.

36. All concerned must act upon the authenticated copy of this order. (Jitendra Jain, J) (M.S. Sonak, J)