Not given reward though it is almost two years since his tip-off
A Member of Parliament has voiced concern that inordinate delay in the disbursement of monetary rewards to informants helping the government detect tax evasion might block further information from them.
The government has designed a system for payment of monetary rewards to those who help it in detection of tax evasion with concrete information.
It has come to light that it takes several months for the government to pay the reward. In one such case, an informant has been awaiting Rs. 2 crore in reward for almost two years since he passed information on to the Central Excise Department, leading to the recovery of several crores of rupees in tax from a leading steel manufacturer.
Under the scheme operated by the Central Excise Department, rewards are given to those who detect common methods of tax evasion: manufacture and clearance of excisable goods without central excise registration; suppression of production (i.e., manufacturing goods without properly accounting for them in the records); mis-declaration/under-valuation of product (i.e., manufacturing under the guise of repair, etc.,); selling goods at higher price than what is declared in invoices; and clandestine removal (i.e., removing the goods without accounting for them and without payment of duty). Even a transporter storing such unaccounted goods is liable for action.
The Department acknowledges the receipt of information from an informant. Its officers are bound to maintain secrecy about informants and the source of information. Their name and address are kept confidential. An informant is given the reward if the information he has given is proved correct, and the duty payable by the assessee is recovered. The reward is up to 20 per cent of the duty evasion detected and realised.
In August 2010, MP Prasanna Kumar Patasani brought to Union Finance Minister Pranab Mukherjee's notice the sanction and release of a monetary reward to an informant. In his November 2010 reply, Mr. Mukherjee wrote that the matter was examined and instructions were issued to the Director-General of the Central Excise Intelligence to consider sanctioning a part of the final reward to the informant.
In June 2011, another MP, Rajniti Prasad, wrote to the Finance Minister, stating that the reward was yet to be sanctioned and disbursed. He said if there was delay in reward payment, people would not come forward to disclose the real asset, and it might block further information from the informant.
In October 2011, Minister of State for Finance S.S. Palanimanickam informed Mr. Rajniti Prasad that the reward committee had already sanctioned Rs. 2 crore as part of the final reward to the informant, and steps were being taken to allocate the fund for disbursal of the sanctioned amount. Curiously, even four months after the sanction order was passed, the reward has not been disbursed, highly placed sources say.