Cellular operators told to furnish accounts to CAG

August 2nd, 2010 - 8:01 pm ICT by IANS  

New Delhi, Aug 2 (IANS) The Supreme Court Monday directed cellular operators to furnish details of their accounts on revenue sharing with the Department of Telecommunication (DoT) to the Comptroller and Auditor General of India (CAG) within two weeks.
However, the CAG was restrained from proceedings with the auditing of these accounts till the Cellular Operators Association of India (COAI) petition being heard by the Delhi High Court was finally disposed.

The apex court asked the high court to expeditiously decide the petition pending before it.

An apex court bench of Chief Justice S.H. Kapadia, Justice K.S. Radhakrishnan and Justice Swatanter Kumar asked DoT to file its reply to the COAI petition before the high court within one week.

The court gave the direction after senior counsel Soli Sorabjee told the court that till date DoT has not filed its counter affidavit (reply) to COAI’s petition in the high court.

The COAI moved the Supreme Court challenging the high court’s interim order directing the cellular operators to submit their revenue sharing details to the CAG.

The COAI contended that the interim order of the high court was not sustainable given the statutory mandate of the CAG.

The operators contended that the CAG had no jurisdiction to audit the accounts of private companies.

The operators have challenged before the high court the jurisdiction of the CAG to conduct an audit of their revenue sharing accounts with the DoT.

It may be recalled that when cellular operations were privatized, the cellular companies made huge bids but subsequently could not pay the government the entire bid amount. As a via media, it was decided that the government would recover the amount through a revenue sharing mechanism.

It was decided that the revenue sharing would be on adjusted gross revenue which effectively meant deducting connectivity and roaming charges and taxes from the gross revenue.

The gross revenue included the income generated from all telecom centric activities including retail operations of the cellular operators.

The cellular operators said that they were furnishing details of revenue sharing accounts to DoT but said that they were opposed to the CAG auditing their accounts.

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