Deputy Prime Minister and Finance Minister MR Pridiyathorn Devakula yesterday backed Revenue Department chief Sirote Swasdipanich and permanent secretary of finance Suparut Kawatkul for the ministry's initial decision not to demand tax from Thaksin Shinawatra's children.

Sirote on Tuesday told the press that the department decided to take action against Thaksin's children after they failed to pay taxes on the Temasek Holdings takeover of Shin Corp.

The statement marked a U-turn in the department's policy as earlier this year it insisted the deal was tax free.

The two men blamed the decision on their subordinates who decided on the matter without seeking the consent of their superiors.

But on February 2, Sirote and Suparut were among the officials who defended the rulings on the tax-fee sale of Shin Corp.

Suparut was quoted as saying "the department based its decision on the tax rules", denying there was undue political influence from the Thaksin administration.

Now Pridiyathorn insists that tax officials who decided not to charge personal income tax from Panthongtae and Pinthongta Shinawatra acted without consulting Sirote or Suparut.

"We asked if the director-general and the permanent secretary had been aware of this decision, and found that there had been no consultation," Pridiyathorn said.

The deputy prime minister added that the director-general later received new information on collecting tax from Thaksin's children and the department took immediate action.

Pridiyathorn said Sirote informed him of the decision and the ministry had issued the letter calling for Panthongtae and Pinthongta to pay 37 per cent

tax on the sale of 329.2 million shares.

The shares were previously held by Ample Rich Investments, a Shinawatra family company registered in the British Virgin Islands tax haven.

"The department said it had been waiting for six months for them to pay tax before September 30. Having missed the deadline, it will take three weeks to proceed with the case because the process has to go through several agencies," said Pridiyathorn.

Meanwhile, Noppadol Pattama, a lawyer representing the Shinawatras, said the family was ready to fight the case in court.

Kaewsan Atibhodi, secretary-general of Assets Examination Committee (AEC), said if new means to collect the tax were discovered and still not implemented, it could be considered as negligence by the financial chiefs.

He said investigations were ongoing into the share deal and refused to say if the department's change of position was a result of political pressure.