Amit Anand Jamkhindikar vs. The Union Of INDIA Through The Ministry Of Finance And Others

Held

The Court held that the petitioner, as an informant, lacks the locus standi to challenge the orders dropping the show cause notices issued to the establishments. The Court reasoned that the mechanism for recovery of illegally obtained CENVAT credit cannot be initiated or challenged indirectly by a third party or stranger like an informant. While the authorities did take cognizance of the petitioner's information and issued show cause notices, these were dropped by reasoned orders after considering the replies. The Court found that it could not indirectly examine the sustainability of these orders, nor should the petitioner be permitted to do so. Furthermore, the Court held that since no recovery had been made pursuant to the petitioner's information, and recovery is a sine qua non for any reward, the petitioner is not entitled to a reward. The petitioner's reliance on Union of India vs. R. Padmanabhan was deemed misplaced, as he was reading portions out of context, and the Supreme Court's observations pertained to the interpretation of reward guidelines and the ex-gratia nature of rewards, not the locus standi of an informant to challenge dropping of proceedings without recovery.

Facts

The petitioner, Amit Anand Jamkhindikar, acting as an informant, provided information to the revenue department regarding respondent establishments (Endress + Hauser Wetzer (India) Pvt Ltd. and Endress + Hauser Flowtec (India) Pvt Ltd.) allegedly illegally deriving CENVAT credit. Based on this information, show cause notices were issued to these establishments. However, the authorities subsequently dropped these proceedings by passing reasoned orders. The petitioner is aggrieved by these dropping orders, contending they were passed without sufficient reasons and that he, as a potential beneficiary of a reward under the Guidelines for grant of Reward to Informers and Government Servants, 2015, has the locus standi to challenge them. The petitioner also sought a reward, admitting no recovery had been made.

Key Issues

1. Whether the petitioner, as an informant who has provided information leading to the issuance of show cause notices, has the locus standi to challenge the legality and sustainability of the orders passed by the revenue authorities dropping those proceedings, particularly when no recovery of revenue has been made. 2. Whether the petitioner, as an informant, is entitled to a reward under the Guidelines for grant of Reward to Informers and Government Servants, 2015, in the absence of any recovery of revenue or imposition of penalty or interest. Petitioner's arguments: The petitioner argued that the orders dropping the show cause notices were passed without sufficient and cogent reasons, ignoring the alleged undeserved CENVAT credit benefits derived by the establishments. He asserted that as a beneficiary of a reward, he has the right to assail these orders. He relied on the Supreme Court's observations in Union of India vs. R. Padmanabhan. Revenue's arguments: The learned DSGI for the Union of India strongly opposed the petitioner's locus standi to question the legality of the orders dropping the proceedings. He further submitted that the guidelines do not permit any reward without any recovery being made at the petitioner's instance.