AG defends his opinions on CAG report

Attorney General G E Vahanvati today defended before a Parliamentary Committee his two "contradictory opinions" on a CAG report which said the expenditure on interest payment on tax refunds was in contravention of Constitutional provisions.
Deposing before the Public Accounts Committee (PAC), he said the opinions cannot be called "mutually contradictory" as his second opinion was based on more documents provided to him by the Finance Ministry.
He said the first opinion was based on limited documents given to him, sources said.
But at the fag end of his deposition, Vahanvati agreed that a subordinate authority cannot bypass Parliament and incur expenditure not approved by the legislature, the sources said.

He was asked whether a subordinate authority like the Income Tax department can bypass Parliament and incur expenditure not approved by it.
Sources said he told that panel that Article 114 of the Constitution which deals with the Consolidated Fund of India will prevail.

In his first opinion, the AG had supported CAG's view that expenditure on interest payment on refund of taxes was in contravention of Constitutional provisions.
But in his revised opinion, he said the Central Board of Direct Taxes (CBDT) was not at fault.
PAC had taken up certain paragraphs of the CAG report on 'Expenditure incurred on interest on refunds of taxes' for examination.

The CAG had noted that expenditure on interest on refunds of taxes amounting to Rs 10,499 crore was incurred by the CBDT in 2010-11 without Parliament's authorisation.