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        2024 (11) TMI 59 - HC - Service Tax

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        Informer reward is an ex-gratia benefit, not a vested right; writ courts will not re-fix the quantum absent arbitrariness. Delhi HC held that an informer reward under the scheme is an ex-gratia, discretionary benefit and does not create a vested right to any fixed percentage ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                            Informer reward is an ex-gratia benefit, not a vested right; writ courts will not re-fix the quantum absent arbitrariness.

                            Delhi HC held that an informer reward under the scheme is an ex-gratia, discretionary benefit and does not create a vested right to any fixed percentage or claimed quantum. The competent authority must assess the informant's role, the specificity and usefulness of the information, the risk undertaken, and the contribution to recovery and enforcement. Because that assessment is factual, writ jurisdiction will not ordinarily re-quantify the reward absent manifest arbitrariness. The Court also found no guideline-based requirement of a personal hearing before fixing the reward, so the administrative determination was upheld and the claim for the full reward was rejected.




                            Issues: Whether the petitioner was entitled to claim the full reward under the informer reward guidelines and whether a personal hearing was mandatory before determining the quantum of reward.

                            Analysis: Rewards under the informer scheme are ex-gratia in nature and are governed by the discretion of the competent authority. The governing guidelines provide only an upper limit of reward and require a case-specific assessment of the informer's role, the specificity and usefulness of the information, the risk undertaken, and the extent to which the information contributed to recovery and enforcement action. The amount already granted could not be re-quantified in writ jurisdiction, as such assessment would require factual evaluation of the informer's contribution and the department's own investigative effort. The scheme did not create a vested right to a fixed percentage reward, and no procedural requirement of a personal hearing was shown in the guidelines.

                            Conclusion: The claim to a full reward was rejected, and the absence of a personal hearing did not vitiate the decision. The decision of the authorities was upheld.

                            Final Conclusion: No enforceable right to the claimed quantum of reward was established, and the Court declined to interfere with the administrative determination under the reward scheme.

                            Ratio Decidendi: A reward under an informer scheme is an ex-gratia, discretionary benefit that cannot be demanded as a matter of right, and writ jurisdiction will not ordinarily be used to reassess the quantum fixed by the competent authority absent manifest arbitrariness.


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                            ActsIncome Tax
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