The Supreme Court instructed the reward committee established by the Union Ministry of Finance to reconsider the reward amount given to an individual who provided information about tax evasion by the news agency ANI Media Pvt Ltd. The person, referred to as the appellant, had given information about ANI Media evading service tax amounting to Rs 2.59 crore, according to a LiveLaw report. As a result of the appellant's information, the defaulter came forward and paid the tax dues voluntarily.
The Union Ministry of Finance’s "Reward to Informers," policy entitles the informant to receive a reward based on the amount of tax evaded, plus any fines and penalties levied. As per the policy, the reward could be up to 20% of the evaded amount. The appellant was dissatisfied with the reward of Rs 5.50 lakh sanctioned by the reward committee. He contended that he deserved Rs 51.80 lakh, as per the policy.
In 2015, the appellant approached the Bombay High Court through a petition. The Principal Commissioner of Service Tax confirmed that the appellant's information led to the recovery of the evaded tax. The High Court stated that the case involved disputed facts and advised the appellant to file a civil suit instead. Unhappy with the High Court's decision, the appellant appealed to the Supreme Court.
The Supreme Court found that the reward committee had not properly considered the case and had not provided valid reasons for the amount awarded. The Court emphasised that decision-makers should give well-founded reasons for their conclusions and that later attempts to justify the decision through affidavits were insufficient.
The bench comprising Justices Abhay S Oka and Justice Sanjay Karol observed, “The minutes show complete non-application of mind on the prayer made by the appellant. It is well settled that if the decision-making authority does not record reasons for coming to a particular conclusion, the reasons cannot be supplied by filing affidavits,” Live Law reported the court as saying.
The Court pointed out that in 2018, there was an indication from the Additional Solicitor General that the reward amount would be increased to Rs 9.45 lakh. The Supreme Court ruled in favour of the appellant in part and directed the reward committee to reassess the case and determine if the appellant deserved a higher reward. According to the policy, the committee, consisting of three members, has the authority to decide on the reward. The court's ruling will lead to a re-evaluation of the appellant's case, and a decision will be made within six months.