Telcos' plea against CAG audit next week: SC

Senior counsel Harish Salve for operators' associations argued that opening CAG audit to private firms' accounts was unconstitutional

The Supreme Court on Monday set for hearing next week, the appeals of telecom operators challenging the high court here, ruling that the Comptroller and Auditor General (CAG) is authorised to audit their accounts.

Arguing for the operators’ associations, senior counsel Harish Salve stated CAG audits of private firms’ accounts were unconstitutional. The law permits audit only of government revenue like those from income tax or excise.  “If the high court view stands, our accounts also should be written by CAG,” he sarcastically remarked.

On the other hand, Additional Solicitor-General Paras Kuhad said that whatever was payable to the government could be audited by the CAG. The Constitution allows special audit in certain circumstances and Parliament has authorised it under the Trai law.

The Bench headed by Justice K S Radhakrishnan said that this was the first time such an issue had been raised and, therefore, it should be heard in detail and posted the case for next Tuesday.

The high court last month dismissed the telecom companies’ petitions observing, “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 the income derived by the state from any contract cannot be kept out of the general revenues.”

The petitions were moved by the Association of Unified Telecom Service Providers of India and the Cellular Operators Association of India against orders issued by the Director General of Audit, Post & Telecommunications to all telecom service providers, directing them to produce books of accounts for verification to the CAG for three years from 2006-07 to 2008-09.