The Supreme Court has deferred to October 13 Vodafone Idea’s plea against DoT’s fresh Rs 5,606 crore AGR demand. Both the Centre and VIL sought more time to work out a possible solution.
New Delhi: The Supreme Court on Monday decided to postpone till October 13 the hearing on a petition filed by Vodafone Idea Limited (VIL). The company has asked the court to cancel the fresh adjusted gross revenue (AGR) demand notices raised by the Department of Telecommunications (DoT) for the financial year 2016–17.
The matter was listed before a bench headed by Chief Justice B.R. Gavai and Justice K. Vinod Chandran. Though the case was scheduled for hearing, it was adjourned after Solicitor General Tushar Mehta, appearing for the Union government, requested more time.
The request was supported by senior advocate Mukul Rohatgi, who was representing Vodafone Idea. Both urged the court to hear the matter before the Diwali vacation, and the bench agreed.
Vodafone Idea has challenged the DoT’s new demand of Rs 5,606 crore as part of its AGR dues for 2016–17.
In its plea, the company has sought clear directions to the DoT to
“comprehensively re-assess and reconcile all AGR dues for the period up to FY 2016-17 following the ‘Deduction Verification Guidelines’ dated February 3, 2020.”
Earlier, the government had told the court that it was holding discussions with Vodafone Idea to find a solution. Solicitor General Mehta also pointed out that the Centre has a direct financial stake in the survival of the telecom operator, as it holds nearly 50% equity in the company.
Mehta submitted before the bench,
“Some solution may have to be found out, subject to your lordship’s approval. If it can be kept next week, we can think of some solution,”
This new petition comes after a series of legal setbacks faced by telecom operators in the past. In 2021, the Supreme Court had dismissed pleas filed by Vodafone Idea and Bharti Airtel that sought correction of alleged errors in the calculation of AGR dues.
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The companies had argued that the amounts demanded contained “arithmetical mistakes and duplication of entries,” but the court rejected their review petitions against its earlier July 23, 2021 order.
The issue of AGR dues has been one of the biggest financial challenges for the telecom sector. In September 2020, the Supreme Court gave telecom operators 10 years to pay off the massive Rs 93,520 crore in AGR-related dues.
The court ordered that 10% of the total amount must be cleared by March 31, 2021, while the balance would have to be paid in annual instalments from April 1, 2021, to March 31, 2031.
At that time, the court had declared that the DoT’s demand was final and that no further reassessment or disputes would be entertained.
This was in line with the landmark judgment of October 2019, which held that the definition of AGR would include both telecom and non-telecom income.
However, in 2021, the central government amended the rules to exclude non-telecom income from the AGR definition, thereby reducing the burden on operators for future payments.
The October 13 hearing is now expected to be crucial, as the outcome could decide whether Vodafone Idea is granted relief from the new AGR demand of Rs 5,606 crore or whether the earlier rigid stance of the court continues.
Case Title:
Vodafone Idea Ltd. v. Union of India
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