Monday, 30th October 2017

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Supreme Court slams telecom operators for reassessing dues

It appeared to have turned down DoT’s plea to allow the staggered payments over a 20-year period

By Our Legal Correspondent in New Delhi
  • Published 19.03.20, 1:13 AM
  • Updated 19.03.20, 1:13 AM
  • 2 mins read
“Exercise of self-assessment of AGR dues by the telecom companies cannot be permitted even in wildest dreams,” the bench of Justice Arun Mishra, Justice S.A. Nazeer and Justice M.R. Shah said. (Shutterstock)

The Supreme Court on Wednesday slammed the Centre for permitting the reassessment of the AGR (adjusted gross revenue) dues by the telecom operators and said there was no question of of any “self-assessment” or “reassessment” even as it refused to take up the Centre’s plea to give the operators 20 years to pay their remaining arrears, stating the application would be taken up after two weeks.

“We order that no exercise of self-assessment/re-assessment should be done and the dues which were placed before us have to be paid as we have affirmed those dues including interest and penalty, as ordered in the judgment. It is shocking and surprising that companies are paying a fraction of the revenue earned by them and they are keeping it with them for so long,” the bench of Justice Arun Mishra, Justice S.A. Nazeer and Justice M.R. Shah said.

The bench said it would summon the secretary and desk officer of the Department of Telecommunications (DoT) who permitted the telecom companies to do the self-assessment of AGR dues.

The apex court also appeared to have turned down the DoT’s plea to allow the staggered payments over a 20- year period.

“The time frame of 20 years is unreasonable. The telecom companies have to clear all dues mentioned in the judgment,” the bench said.

“Tushar Mehta (the solicitor general) has filed an application with respect to giving reasonable time and to cease the interest after a particular date. With respect to the subject-matter of application, we will consider on the next date of hearing.”

The court said serious fraud was being committed by telecom companies by asserting to do the self-assessment of AGR dues and that its judgment was final and to be followed in letter and spirit.

The court also said that newspaper articles will not be able to influence its decision and it will draw contempt proceedings against the managing directors of telecom companies if they publish “fake news” against court on the payment of AGR dues.

“Any future newspaper article hiding truth from public on telecom case will make MDs (managing directors) of telcos personally responsible,” the bench said.

“Telecom companies think they are more powerful than us. They think they are so powerful and that is why they are influencing the newspapers to write stories in their favour everyday. If we want, we can send their MDs directly to jail!”Justice Mishra observed during the hearing.

“There is no question of reopening of judgment…it will be a fraud if we allow this,” Justice Mishra said even as a battery of lawyers appearing for the companies suggested that the court may consider the DoT’s proposal for the staggered payment of the dues.

The apex court had on October 24 last year ruled that the statutory dues need to be calculated by including the non-telecom revenues in AGR of telecom companies. It had upheld the AGR definition formulated by the DoT and termed “frivolous” the nature of objections raised by the telecom service providers.

Conflicting math

The DoT had demanded Rs 1.47 lakh crore from the operators: Rs 92,600 crore as licence fee and Rs 55,100 crore as spectrum use charges.

The licence fees of the operators, including interest and penalties, were calculated till 2016-17, while the spectrum charges were calculated till 2018-19.

In its application before the Supreme Court, seeking staggered payment, the DoT had said the outstanding dues were calculated up to 2016-17, while the interest, penalty and interest on penalty was calculated up to October 2019. As per this application, the total demand has been calculated as Rs 169,048.65 crore.

Bharti Airtel has said it has carried out self-assessment from 2006-07 onwards up to December 31, 2019, and interest thereon up to February 29, 2020 in line with the AGR judgment.

Vodafone said it had carried out self-assessment from 2006-07 to 2018-19 and interest up to February 2020.

Bharti has calculated its dues at Rs 13,004 crore, while Vodafone Idea said its dues were Rs 21,533 crore.