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cannot be dealt with by audit and issues of legality can only be dealt by courts.”
The EGoM, it is learnt, had decided that the “set-off” may be allowed on the earnest money to be paid by telecom firms winning spectrum at the 2012 auction.
Explaining the reasoning behind the EGoM decision, the DoT said it was based on the “principle of equal restitution” and “the set-off allowed was not in the nature of refund as it was allowed only to the companies that participated and were successful in the auction. It is also to be noted that these companies were pressing for compensation under bilateral investment agreements”.
Responding to the CAG observation that failure to penalise telecom firms for not meeting the roll-out obligation - the legal obligation to provide services - resulted in revenue loss, the DoT has said that policy decisions are the domain of government.
“Imposing a penalty for not fulfilling roll-out obligations is a matter of discretion. CAG cannot decide on behalf of the competent authority on the quantum of penalty which should be imposed,” the DoT has said, citing Supreme Court judgments to support its stance.
The latest audit was examining the 2012 auction process in the light of the Supreme Court ruling that the process followed by the government in 2008 was not transparent. The audit covers five firms: Telewings (formerly Telenor), Videocon, Sistema Shyam, Idea and Airtel.
While the CAG argues that it had found irregularities in the 2008 allotment, the DoT has maintained that a final legal view is yet to be taken by the court.
Senior CAG and DoT officials met on October 22 to try and resolve the matter and the auditors are expected to send a final report to CAG Shashikant Sharma at the end of November. Sharma has to approve it before it is submitted to Parliament.