No revenue sharing pact with govt: COAI tells SC

Government maintains that whatever was payable to it could be audited by CAG

Telecom operators told the Supreme Court today that they have no revenue sharing arrangement with the government and they were paying only licence fees. Therefore, the CAG was not authorized to  audit them.

There is already a statutory audit and a special audit. Now they cannot be burdened with another audit, counsel Harish Salve submitted.

The telecom operators under the banner of Association of United Telecom Service Providers and Cellular Operators Association of India (COAI) have challenged the Delhi high court ruling that the Comptroller and Auditor General is authorized to audit their accounts. They argue that the CAG audit is unconstitutional.

According to them the law permits audit only of government revenue like those from income tax or excise.

On the other hand, the government maintains that whatever was payable to the government could be audited by CAG. The Constitution allows special audit in certain circumstances and Parliament has authorized it under the TRAI law.

The bench headed by Justice K S Radhakrishnan adjourned the hearing for Wednesday when the arguments will continue.

The high court last month upheld the order issued by the Director General of Audit, Post & Telecommunications to all telecom service providers to produce books of accounts and other documents for verification of revenue to the CAG for three years from 2006-07 to 2008-09.providers.

The high court observed that, "If all the income of the State must, in view of the constitutional requirements, be credited to and form part of the Consolidated Fund of the State, it is obvious that the income derived by the State from any contract, cannot be kept out of the general revenues."