Informant reward guidelines applied purposively where supplied information led to search and recovery of additional tax, with further reward consideration ordered.

Informant reward under Clause 13.1 of the 1993 guidelines was treated as payable where the supplied information materially led to search, settlement proceedings, and recovery of additional tax. The High Court held that a narrow objection on lack of specificity could not defeat the factual nexus between the information and the revenue realised, so the informant was entitled to the unpaid balance reward after adjustment of sums already paid. It also held that the case merited consideration under the proviso to Clause 13.1 for reward beyond the monetary ceiling, and directed the competent authority to consider reward up to 10% of tax levied and realised.

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Issues: (i) Whether the informant was entitled to the balance reward under Clause 13.1 of the reward guidelines on the basis that the information materially led to search, detection and realization of additional tax. (ii) Whether the matter warranted forwarding for consideration of reward beyond the monetary ceiling of Rs. 5 lakhs under the proviso to Clause 13.1.

Issue (i): Whether the informant was entitled to the balance reward under Clause 13.1 of the reward guidelines on the basis that the information materially led to search, detection and realization of additional tax.

Analysis: Clause 13.1 of the 1993 guidelines permits reward up to 10% of the extra tax levied and actually realised, subject to a monetary ceiling, if the tax is directly attributable to the information supplied by the informant. The information led to search proceedings in a remote area, resulted in settlement proceedings, and ultimately yielded substantial additional income and tax recovery. The subsequent objection that the information was not sufficiently specific could not displace the factual nexus between the information and the revenue gain.

Conclusion: The informant was entitled to the balance reward of Rs. 5 lakhs after adjusting the amount already paid.

Issue (ii): Whether the matter warranted forwarding for consideration of reward beyond the monetary ceiling of Rs. 5 lakhs under the proviso to Clause 13.1.

Analysis: The proviso to Clause 13.1 permits waiver of the ceiling in suitable cases with approval of the Full Board. Since the information had led to recovery of significant additional tax and the area had earlier remained outside the Department's effective reach, the case was fit for consideration under the proviso.

Conclusion: The competent authority was directed to consider the claim for reward up to 10% of the tax levied and realised.

Final Conclusion: The petition succeeded in substance by securing payment of the unpaid reward and by requiring consideration of any further reward under the guideline proviso.

Ratio Decidendi: Where informant information is found to have materially contributed to search, assessment and realization of additional tax, the reward guidelines must be applied purposively and the authority cannot deny the reward on a narrow view of specificity.

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