Finance Ministry didn't seek nod to spend Rs 37,365 cr: Panel

Amount was used to pay interest on income-tax returns for 5 fiscals

Finance Ministry didn't seek nod to spend Rs 37,365 cr: Panel

A parliamentary panel is learnt to have found fault with the Finance Ministry for not seeking approval for incurring an expenditure of Rs 37,365 crore for five fiscals from 2006-07 to pay interests on income tax refunds.

Of this, Rs 10,499 crore was incurred in the 2010-11 fiscal alone, sources said quoting a draft report of the Public Accounts Committee, which disapproved of the withdrawal of money from the Consolidated Fund without parliamentary approval through appropriations.

The secretary of the revenue department has assured the committee that they would devise a procedure which is constitutionally correct and administratively feasible.

The ministry officials were of the view that it would not be possible to calculate the interests to be paid on refunds, a view contradicted by the panel. The panel is of the view that the revenue department can make broad estimates based on past trends and seek excess grants. The panel started looking into the issue following the Comptroller and Auditor General (CAG) report.

Sources said the panel had noted that the Finance Ministry had sought a review of the opinion provided by Attorney General (AG) G E Vahanvati on September 2012.

Initially, sources said, the AG had opined that the CAG stand on the issue was completely justified and that administrative difficulties in seeking Parliamentary approval is not a tenable argument. 

He had then opined that the ministry’s action was in contravention of the provisions of the Constitution. 

However, in a subsequent opinion, sources said he changed his stand.

It is learnt that the law secretary, who deposed before the panel, said they referred the matter for a revised opinion from the AG because the Finance Ministry, at the level of the finance minister, wanted reconsideration of the opinion that had been tendered earlier.

Sources said the panel was of the view that the revenue department approached the AG for a second time in order to strengthen their case for continuing with the practice of not taking prior parliamentary approval for withdrawal of money for paying interests on income tax refunds.

The panel is also learnt to have recommended that the ministry should desist from taking any action, which even remotely tinkers with or dilutes parliamentary control over public purse in any manner. It is also understood to have said that no departure can be allowed from the Constitutionally ordained procedure.

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