The Supreme Court today said that the Comptroller
and Auditor General (CAG),
is empowered to audit
private telecom companies.
A two-judge bench, comprising Justices K S
Radhakrishnan and Vikramjit Sen held that private companies utilize spectrum,
which is national wealth, in providing the services and so their profit-loss
accounts could be looked into by the CAG.
The Delhi High Court had in January this year upheld
the validity of laws empowering CAG to conduct revenue audits of private
telecom firms. Private telecom companies and Cellular Operators Association of
India had challenged the Delhi High Court order.
The Centre had argued that in private-public
partnership ventures, the revenue generated by the licencees is required to be
shared with the Union government in line with the licencing agreements. Telecom companies pay a portion of their
revenue as licence fee to the government.
The CAG had initiated an audit after TRAI found that
some telecom operators were allegedly under-reporting income to avoid paying
revenue share to the Government.
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