SC allows full reassessment of Vodafone Idea AGR dues
New Delhi, Nov. 4 -- The Supreme Court on Monday clarified that the Centre could reassess and reconcile Vodafone Idea's entire adjusted gross revenue (AGR) dues, including penalty and interest , up to financial year 2016-17, broadening the scope of an earlier order.
A bench of Chief Justice of India (CJI) Bhushan R Gavai and justice K Vinod Chandran modified its earlier order passed a week ago after an urgent mention by senior advocate Mukul Rohatgi appearing for Vodafone Idea (Vi) with solicitor general Tushar Mehta also present in court for the Centre.
Rohatgi said that the order passed on October 27 had restricted the scope for consideration by the Centre only to "additional" AGR dues payable up to 2016-17. He urged the court to consider suitable modification which permits the Centre to have a full re-assessment on all additional dues along with interest payable by the company.
The earlier order said, "It is further to be noted that the prayer in the petition itself restricts its claim only to the additional AGR demand raised by the respondent for the period up to the Financial Year 2016-17."
To this paragraph, the court added the words, "The government can reconcile, reassess entire arrear dues up to 2016-17, including penalty and interest."
The bench said that the earlier order was based on the prayer made by Vi in its petition before the court. However, Mehta supported the prayer made by the company. He said that the order of last week restricts the scope of reassessment to the "additional AGR demand" from the the Department of Telecommunications cited by Vi, for the period up to the financial year 2016-17. This fresh demand was assessed at Rs.9,450 crore.
The judgment passed by the court clarified that such an order will apply only to Vi and is passed in the peculiar facts of the case as the government has acquired 49% equity in the company in order to protect the interest of nearly 20 crore consumers. This was cited as a "change in circumstances" by the government to go for a "reassessment".Noting these facts, the court order had said, "We clarify that this order is passed only with regard to the petitioner-Vodafone Idea Ltd., taking into consideration the peculiar facts and circumstances of the case as put up by the Union of India, that it has acquired 49% equity in the petitioners' company and that the issue involves public interest inasmuch as 20 crore consumers are being affected."
Vi shares jumped 9.74% to Rs..58 on the NSE on Monday.
The telecom major had approached the top court earlier this year challenging the Department of Telecommunications' (DoT) fresh demand notice for Rs.9,450 crore towards AGR dues. The company said that the Supreme Court's 2019 judgment dismissed their plea against AGR assessment but by a subsequent order of July 2020, the court settled the final AGR liabilities for all telecom operators, including for Vi. This was assessed at nearly Rs.58,000 crore.
Later by an order of September 1, 2020, the top court directed the telecom operators to pay 10% of the dues to DoT by March 31, 2021 and pay the remaining amounts in 10 equal instalments up to March 31, 2031.
The petition by Vi claimed that the total disputed demand amounts to Rs.9,450 crore, of which Rs.2,774 crore relates to the merged entity Vodafone Idea for FY18-19; Rs.5,675 crore pertains to pre-merger liabilities of the Vodafone Group; and the remaining amount arises from other reconciliations flagged by DoT. The DoT, on the other hand, stated that the dues are not a "reassessment" of liabilities but represent "gaps" that emerged during the finalisation of financial accounts....
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