C.K. Paul vs. Union Of INDIA

Facts

The petitioner, C.K. Paul, a retired Superintendent of the Central Excise Department, provided information regarding service tax evasion by M/s. Friends Auto Garage. This led to the recovery of Rs. 5,47,390/-. The petitioner claims his reward was inadequately considered, receiving only Rs. 10,000/-, whereas he believes he is entitled to 20% of the recovered amount as per departmental circulars. The respondents, represented by the Union of India and Commissioners of CGST and Central Excise, contend that reward grants are discretionary and that the petitioner, as a former government servant, is subject to specific reward limits for such individuals. The petitioner disputes being treated as a government servant for this purpose, as the information was provided after his retirement.

Held

The Court held that the matter requires reconsideration by the 3rd respondent (Commissioner of CGST and Central Excise, Cochin). The 3rd respondent is directed to consider the petitioner's claim for reward in terms of the applicable circulars, including Ext. P3, and determine if any further amount is due. The Court emphasized that the decision must be taken in accordance with the law and the instructions and circulars referred to. Crucially, the 3rd respondent must also consider the judgment of the Bombay High Court in XYZ v. Union of India (Supra). An opportunity of hearing must be provided to the petitioner before a fresh decision is taken. The 3rd respondent is to render this decision within three months of receiving a certified copy of the judgment. The Court explicitly stated that it had not expressed any opinion on the merits of the petitioner's claim.

Key Issues

1. Whether the petitioner's claim for reward should be considered strictly in terms of applicable circulars, and not left to the discretion of officers, considering the Bombay High Court's decision in XYZ v. Union of India (2015 SCC OnLine Bom 4884)? 2. Whether the petitioner, having retired before providing the information leading to the recovery, can be classified as a 'Government servant' for the purpose of determining the reward limits under Exts. P3 and P5? Petitioner's Arguments: The petitioner argues that the reward claim must be processed strictly according to the circulars, citing the Bombay High Court judgment. He further contends that he should not be treated as a Government servant for reward calculation as he retired before the information was provided and the recovery was made. Revenue's Arguments: The respondents argue that the grant of reward is purely discretionary. They contend that the petitioner, being a former employee, falls under the category of Government servants, and therefore, the reward limits specified for Government servants in Exts. P3 and P5 are applicable to him.