1. ' SAEEDUZZAMAN SIDDIQUI, J.--The petitioner has challenged in the above petition the order of Respondent No,2, dated 28th March, 1988, whereby the petitioner is held disentitled to the reward as an informant under Cash Reward Scheme of the Central Board of Revenue, dated 14th May, 1974, in respect of evasion of sales tax and income tax by M/s. Valika Chemical Industries Ltd., detected by the authorities. For the sake of convenience, we will refer the firm M/s. Valika Chemical Industries Limited as "the Valika" and the Cash Reward Scheme of Central Board of Revenue, dated 14th May, 1974 as "the Scheme" only respectively. The background of the controversy may be stated as follows.
2. ' The petitioner has alleged that as a result of specific information supplied by him to the Director of Intelligence and Investigation (Customs and Excise) Karachi in 1970, huge amount of evasion of excise duty, sales tax and income tax by the Valika was detected and as such he respondent was entitled to cash reward in accordance with the Scheme. It may be mentioned here that the allegation of the petitioner that he supplied specific information regarding evasion of taxes by the Valika is not disputed by the Respondents. It is however, contended by the respondents that the information supplied by the petitioner related only to evasion of excise duty and, therefore, he was not entitled to any reward in respect of evasion of sales tax and income tax detected by the authorities. It may also be mentioned here that prior to the filing of the above petition, the petitioner had filed C.P. No, 766 of 1980 in this Court to challenge an earlier order of Respondent No,2 dated 11-3-1980 holding him disentitled to the cash reward under the Scheme, which was set aside by consent of the parties on 16-9-1985 on the ground that it was not a speaking order, and the case was remanded back to Respondent Nos. 2 for a fresh decision in accordance with law. The order, dated 28th March, 1988, impugned in the above petition is passed after remand of the case by this Court in C.P.No, 766/80. In the impugned order dated 28th March, 1988, the petitioner has been held disentitled to the cash reward under the Scheme on two grounds. Firstly, that the specific information supplied by the petitioner related only to the evasion of excise duty and as such the detection of evasion in respect of sales tax and income tax by Valika, by the authorities concerned was the result of investigation by the Department concerned and, therefore, the petitioner cannot claim any cash reward in respect thereof, in terms of the Scheme. The second ground on which respondent No,2 held the petitioner disentitled to cash reward under the Scheme in respect of detection of evasion of income tax by the Valika, is, that during the relevant assessment years no income tax demand was created against the Valika because of previous losses, therefore, no reward is admissible to the petitioner in respect of the information given by him pertaining to evasion of income tax. Similarly in respect of evasion of sales tax by the Valika, Respondent No,2 held, that as the Company has gone into liquidation and no recovery of the evaded tax could be made, therefore, petitioner was not entitled to any reward under the Scheme.
3. ' It may be mentioned here that in previous Petition No,766/80 filed by the petitioner against the earlier order of Respondent No,2 dated 11-3-1980, the petitioner had categorically stated that the detection of evasion of exicse duty, sales tax and income tax by the Valika was the result of the information supplied by the petitioner. This petition was allowed by consent on 16-11-1985 and the case was remanded back to Respondent No,2 for disposal according to law. It is pertinent to mention here that in the above petition namely C.P. No,D-766/80 no counter-affidavit was filed by the Respondents to challenge or rebut the factual position alleged by the petitioner. Along with the previous Petition No,D-766/80 referred to above as well as with this petition the petitioner has filed a certificate issued by Ex-Member, Central Board of Revenue, Islamabad, Mr. Syed Ahmed, dated 18-12-1976, in which it is clearly certified that the petitioner was the sole informant in the case of evasion of excise duty and sales tax by the Valika (Case No,38 of 1970), which were detected while he was acting as Director of Intelligence and Investigation (Customs & Excise), Karachi. The correctness of this certificate which was produced by the petitioner in the earlier petition as well as in this petition has not been denied or disputed by the Respondents. Apart from it, from the letters, dated 15th March, 1977 and 5-12-1977, addressed by the Director, Intelligence and Investigation (Customs & Excise) Karachi, to Collector, Central Excise and Land Customs, Karachi, and Commissioner of Income Tax, Central Zone A, Karachi, it is quite clear that evasion of excise duty and sales tax was detected as a result of information supplied by the petitioner and it was recommended that the amount of reward calculated in accordance with the Scheme may be sanctioned in favour of the petitioner. Similarly, from reading of the letter dated 4-11-1977 addressed by the Director of Intelligence and Investigation (Customs & Excise), Karachi, to Commissioner of Income tax, Central Zone A, Karachi, it would appear that evasion of income tax by the Valika was also detected as a result of information provided by the petitioner. To the same effect is letter, dated 2nd March, 1980 addressed by the Director of Intelligence and Investigation (Customs & Excise), Karachi, to the Commissioner of Income tax, recommending for sanction of the reward amount in respect of the evasion of sales tax and income tax detected on the basis of the information provided by the petitioner. The genuineness of these documents is not disputed by the Respondents. In fact from the following observations made by Respondent No,2 in para 7 of the impugned order, dated 28th March, 1988 it would also appear that the detection of evasion of income tax was the result of the information supplied by the petitioner:- "7 The factual position of the Income Tax assessment orders for 1969-70 to 1972-73, relevant to the information supplied by the petitioner is as follows:-- Assessm ent yearReturned loss Assessed loss 1969-70Loss Rs.40,27,293 without statutory depreciation claim of Rs.53,90,293Loss Rs.35,95,223 1970-71Loss Rs.11,41,206 without statutory depraciation claim of Rs.50,63,594Loss Rs.2,33,894 1971-72- Loss Rs.1,13,90,185Loss Rs.23,50,185 1972-73 Loss Rs.1,67,48,239Loss Rs.46,19,810"
4. ' We are, therefore, of the view that the material on record sufficiently shows that the detection of evasion of excise duty, sales tax and income tax by the Valika was the result of the information supplied by the petitioner. The petitioner is, however, denied the cash reward in respect of detection of evasion of sales tax and income tax under the Scheme on a further ground namely, that no recovery in respect of these taxes could be made from the Valika. The Scheme under which petitioner claimed payment of reward reads as follows:-- "CASH REWARD TO INFORMERS Government of Pakistan Ministry of Finance, ' Planning & Development (Central Board of Revenue)
5. ' Islamabad the 14th May.
6. 1974.
7. ' In supersession of all previous rules/instructions on the subject, the Government of Pakistan is pleased to make the following order for grant of rewards to non-official informers giving specific information leading to the detection of evasion of tax.
(2) The following shall be the scale of rewards:-
(a) Where tax sought to be evaded is Rs. 20,000 or less25% of the tax sought to be evaded.
(b) Where tax sought to be evaded exceeds Rs.20,000 but does not exceed Rs.
8. 5,00,000.Rs.5,000+ 12-1/2% of the tax sought to be evaded as exceeds Rs.20,000.
(c) Where tax sought to be evaded exceeds Rs.5,00,000Rs.65,000+5% of the tax sought to be evaded as exceeds Rs.5,00,000.
(3) Every Commissioner of Income Tax, Controller of Estate Duty and the Collector of Central Excise and Land Customs shall be the competent authority for the sanction and payment of the reward referred to in paras 1 and 2 above.
(4) Half of the admissible reward shall be paid immediately after completion of assessment and the balance after the amount of tax sought to be evaded has been finally confirmed in appeal or revision.
9. (4-A) The competent authority, if satisfied with the information leading to detection of evasion of tax, may sanction an "ON ACCOUNT" payment not exceeding Rs,1,000, adjustable against the reward admissible under para 4, pending completion of the assessment. For 'on account' payments exceeding Rs,1,000 but not exceeding Rs,10,000, the competent authority shall be the Central Board of Revenue.
(5) Taxation Officers and staff who show extraordinary initiative and render meritorious services in detecting tax evasion may be given cash rewards which shall not ordinarily exceed two years' salary in any one case. In case of Class I Officers such rewards will be sanctioned by the Government on the recommendation of the Central Board of Revenue. In all other cases rewards may be sanctioned by the Central Board of Revenue.
(6) In this order-- "Tax" means Income tax, Wealth Tax, Estate Duty, Sales Tax, Gift Tax and Central Excise Duty.
10. M. Zulfiqar Chairman Central Board of Revenue and Secretary to the Government of Pakistan"
11. A careful reading of this Scheme will show that if the detection of evasion of tax is the result of some specific information Oven by a non-official then the person giving such information is entitled to the reward in the scale prescribed in paragraph 2 of the Scheme. In paragraph 6 of the Scheme the "tax" is defined as meaning income tax, wealth tax, estate duty, sales tax, gift tax and central excise duty. From the provision of the Scheme reproduced above, it does not appear that in order to entitle an informant to a reward under the Scheme, the amount of evaded tax must also be recovered. Under the Scheme it is enough if the specific information supplied by the informant to the Authorities led to the -discovery of evasion of any or all the taxes mentioned in paragraph 6 of the Scheme. From the material on record it is sufficiently established that evasion of central excise duty, sales tax and income tax by the Valika was the result of specific information supplied by the petitioner to the Directorate of Intelligence and Investigation (Customs & Excise), Karachi.
12. We, are, therefore, of the view that even if it is held that in respect of evasion of income tax by the Valika the petitioner had not directly supplied information to the Income Tax Department it could not make any difference as it is not disputed by the Respondents that the detection of evasion of income tax by the Valika was also connected with the information supplied by the petitioner. The only limitation regarding payment of reward to informant provided in paragraph 4 of the Scheme is, that half of the admissible reward is to be paid immediately on completion of assessment and the balance after the amount of tax sought to be evaded has been finally confirmed in appeal or revision. It is not disputed before us that neither any appeal nor any revision is pending against the assessm ent of evaded amount of sales tax and income tax by the Valika. In these circumstances the Respondents are bound to pay reward to the petitioner both on the amount of evaded sales tax and income tax in accordance with the formula prescribed in paragraph 2 of the Scheme. We accordingly declare the order of Respondent No,2, dated 28th March, 1988 as an order without lawful authority and of no legal effect. We further direct the Respondents to pay the admissible amount of cash reward in respect of the evaded amount of sales tax and income tax. There will however be no order as to costs in the circumstances of the case. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.