House pulls up AG for opinion flip-flop

A Parliamentary panel has asked Attorney General GE Vahanvati to appear before it and explain the two contradictory opinions given by him on a CAG report.

A Parliamentary panel has asked Attorney General GE Vahanvati to appear before it and explain the two contradictory opinions given by him on a CAG report, which stated that over Rs 37,000 crore expenditure was incurred by the government during the last five years in violation of the constitutional provisions.

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The Public Accounts Committee (PAC), in its meeting on Friday is learnt to have decided to call Vahanvati to explain the two "mutually contradictory opinions" rendered by him on the CAG report.

In his first opinion given in September last year, Vahanvati had supported the CAG's view that expenditure on interest payment on refund of taxes was in contravention of the constitutional provisions. However, in his revised opinion in May this year, he stated the Central Board of Direct Taxes (CBDT) cannot be blamed on this count.

The PAC also decided to call Revenue Secretary Sumit Bose to explain the Finance Ministry's stand.

The CAG had pointed that expenditure on interest on refunds of taxes amounting to R10,499 crore was incurred by the CBDT in 2010-11 without the Parliament's authorisation.

"A total expenditure of R37,365 crore on interest payments was incurred over the preceding five years without obtaining the approval of Parliament," the PAC note on the issue said

It stated that since the apex auditor was of the view that the expenditure on interest payment on refund of taxes was in contravention of Article 114 (3) of the constitution, the views of the law ministry were sought. The ministry referred the matter to the Attorney General.

Vahanvati in his opinion said "the objection taken by the CAG with regard to the practice followed in relation to payment of interest on refund of excess tax is completely justified."