Informer Of GST Evasion Cannot Seek Reward As A Matter Of Right: Delhi High Court
The Delhi High Court has prima facie observed that an informer, who apprises the Department about evasion of goods and services tax by an entity, cannot seek reward for sharing such information as a matter of right.A division bench of Justices Prathiba M. Singh and Shail Jain were of the prima facie view that no such right vests in any informer.“In the opinion of this Court, the grant of...
The Delhi High Court has prima facie observed that an informer, who apprises the Department about evasion of goods and services tax by an entity, cannot seek reward for sharing such information as a matter of right.
A division bench of Justices Prathiba M. Singh and Shail Jain were of the prima facie view that no such right vests in any informer.
“In the opinion of this Court, the grant of an award or a reward to an informer is a discretionary grant,” it said.
The development comes in a petition moved by one such informer, aggrieved by non-consideration for grant of reward in terms of Notification dated 31st July 2015 issued by the Central Board of Excise and Customs (Anti Smuggling Unit).
Petitioner had provided information with respect to the wrongdoings and evasion of GST by one M/s Shakti Enterprises, pursuant to which a substantial demand was raised on the entity with penalties.
The decision was however modified on appeal and only some small demands were finally raised.
The Petitioner, being an informer, challenged the order-in-appeal and argued that the taxable value was wrongly taken by the Department, leading to a small demand being raised.
The High Court however wondered how the petition would be maintainable, as no right can be claimed by an individual to be given an award or a reward.
“...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 lis on the ground of claiming of an award and contest the private Respondent on merits,” it said.
The Department also relied on the decision of the Supreme Court in Union of India & Ors. v. C Krishna Reddy (2003) 12 SCC 627, to argue that a writ of mandamus cannot be issued at the behest of an informer.
Accordingly, the Court directed the Petitioner/ informer to remain present in Court on the next date of hearing, December 18.
The Parties have also been directed to address the Court on the issue of maintainability of the plea.
Appearance: Mr. Kumar Utkarsh, Adv. for Petitioner; Mr. Gaurav Sharma & Ms. Manpreet Kour, Advs. for UoI Ms. Samiksha Godiyal, SSC with Mr. Tenzing N Bhutia & Mr. BD Rao Kundan, Advs. for Respondent
Case title: XY v. Union of India
Citation: 2025 LiveLaw (Del) 1483
Case no.: W.P.(C) 15498/2025