Business

‘Sheer Contempt’: Supreme Court Slams Govt Over Self-Assessment of AGR Dues 

"Self-assessment by DoT is sheer violation of our orders, sheer contempt," Justice Arun Mishra said. "Who permitted self-assessment? CAG audit has been done. This is in contempt of our orders."

New Delhi: The Supreme Court on Wednesday came down heavily against a plea by the Department of Telecommunications which sought permission to allow telecom operators to make a staggered payment of their adjusted gross revenue (AGR) dues.

While the two-judge bench headed by Justice Arun Mishra deferred the matter, agreeing to hear it again after two weeks, it also fumed over how telecom operators are now ‘self-assessing’ their AGR dues and not paying what was decided upon as per the apex court’s earlier verdict.

“Self-assessment by DoT is sheer violation of our orders, sheer contempt,” Justice Arun Mishra said. “Who permitted self-assessment? CAG audit has been done. This is in contempt of our orders.”

The judge added that the court could not permit another round of litigation on the AGR issue.

To the assertion of Solicitor General Tushar Mehta, who is appearing for the DoT, that there was no reassessment of dues and that only an extension of time was sought, Justice Mishra said: “If this is the attitude of the government, we shall recuse ourselves.”

“We cannot allow encroachment of SC judgment. If we allow these pleas, SC will be party to a fraud. We say with all responsibility that we cannot allow reopening,” the Supreme Court bench said angrily.

Justice Mishra also turned his focus and ire on the role played by the mainstream media, alleging “powerful” telecom companies were influencing newspapers.

“Telecom companies are very powerful and that is why they are influencing the newspapers to write stories every day. If we want, we can send the managing directors from the companies to jail,” Live Law quoted Justice Mishra as saying.

As The Wire exclusively reported this week, the Modi government has now approached the Supreme Court seeking approval for a telecom relief package that would allow operators to pay their unpaid or remaining AGR dues in annual instalments over the next 20 years.

The DoT’s plea before the Supreme Court had stated that telecom service providers liable to make payments had started making payments and the part payment was made arising out of AGR dues.

The petition said that the Centre was dealing with the telcos and it had found that those who were required to make the payments were catering to millions of consumers across the country.

“The Centre is conscious of the fact that any immediate adverse impact on the functioning of telecom service providers would not only have an adverse impact on the overall economy of the nation but would also seriously harm the interest of the consumers across the country,” the petition said.

Also read: Centre’s Relief Package for Telecom Industry May Face Hurdles at Supreme Court

In an apparent and furious response to this, the Supreme Court said: “It’s public money someone is trying to pocket and DoT is saying we are excessive?”

It added: “The government fought tooth and nail and suggested penalty during arguments earlier. Now you want to do away with the interest.”

In October 2019, ending a nearly 15-year-old legal battle, the SC upheld the government’s definition of AGR on which it calculates levies on telecom operators, dealing a huge financial blow to the telecom industry.

Any decision in favour of the DoT’s relief package will give a major boost to the ailing telecom sector, especially Vodafone Idea, which has been on the brink of a collapse. It, however, would also imply that the government will receive a fraction of its earlier estimate of Rs 1.47 lakh crore as AGR-linked dues from the telecom industry.

The idea of ‘self-assessment’ or companies deciding how much AGR dues they could pay, depending on what could be offset through other means, has gained currency in the last month.

For instance, while the DoT had initially demanded that Vodafone-Idea paid AGR dues of Rs 58,254 crore (including penalty and interest), the company’s own self-assessment pegged it far lower at Rs 21,533 crore. So far, the company has paid only Rs 6,854 crore, which is the entire principal amount it had self-assessed.

Bharti Airtel Ltd has pegged its dues at Rs 13,004 crore after self-assessment, less than a third of the Rs 43,980 crore that was estimated by DoT.

(With inputs from agencies)