The CAG's certification under this Article can be challenged in court like other financial decisions.

The Article explicitly states the CAG's certificate on net proceeds 'shall be final,' meaning it is not meant to be reopened through litigation on the specific tax computation covered here.

Article 279 decides how much money each State gets.

This Article only deals with calculating the *net* amount available for sharing and procedural rules; the actual formula for how much each State receives is decided separately, often based on Finance Commission recommendations under other Articles.

The Constitution of India

Article 279

Calculation of “net proceeds”, etc

(1) In the foregoing provisions of this Chapter, “net proceeds” means in relation to any tax or duty the proceeds thereof reduced by the cost of collection, and for the purposes of those provisions the net proceeds of any tax or duty, or of any part of any tax or duty, in or attributable to any area shall be ascertained and certified by the Comptroller and Auditor-General of India, whose certificate shall be final.§

(2) Subject as aforesaid, and to any other express provision of this Chapter, a law made by Parliament or an order of the President may, in any case where under this Part the proceeds of any duty or tax are, or may be, assigned to any State, provide for the manner in which the proceeds are to be calculated, for the time from or at which and the manner in which any payments are to be made, for the making of adjustments between one financial year and another, and for any other incidental or ancillary matters.§

Why this exists

India's Constitution sets up a system where certain central taxes are shared with the States (Articles 268-280A deal with this). But sharing money requires knowing exactly how much is available to share — after deducting the government's cost of collecting the tax. The framers anticipated disputes over these calculations, so they gave the CAG, an independent constitutional authority, the final say on the numbers. They also gave Parliament and the President flexibility to work out administrative details, since rigid constitutional text couldn't anticipate every financial scenario across changing economic conditions.

Common misconceptions

Myth: The CAG's certification under this Article can be challenged in court like other financial decisions.
Fact: The Article explicitly states the CAG's certificate on net proceeds 'shall be final,' meaning it is not meant to be reopened through litigation on the specific tax computation covered here.
Myth: Article 279 decides how much money each State gets.
Fact: This Article only deals with calculating the *net* amount available for sharing and procedural rules; the actual formula for how much each State receives is decided separately, often based on Finance Commission recommendations under other Articles.