The Supreme Court on Wednesday expressed displeasure at the Centre’s plea seeking 20 years’ time to recover dues from telecom companies in annual instalments, Bar and Bench reported. The top court said the government’s proposal was “sheer contempt of court”.
The bench comprising Justices Arun Mishra, S Abdul Nazeer and MR Shah said telecom companies cannot do self-assessment or re-assessment of the adjusted gross revenue dues fixed by the court in its October 2019 order.
“You are making nonsense of everything... How can there be self-assessment or re-assessment of payable dues? Who has permitted this?” Mishra asked, according to Bar and Bench. “If anyone [company] feels they’re more powerful or try to influence us [then] they are wrong.”
Citing the frequently published articles on the AGR dues, the court said the telecom companies were trying to influence the court through media. It added that companies will be held for contempt of court in case anymore such newspaper articles were published.
The court refused to consider modifications to its previous order. “There can be no further exercise regarding dues payable,” the bench observed. “Even telecom companies should not have any further litigation regarding dues payable.”
The top court will now hear the Centre’s plea for fixing reasonable time for making payments on the next date of hearing, two weeks later.
Shares of telecom companies crashed shortly after the top court’s verdict. The Nifty Bank index fell 4.5%, Vodafone Idea dropped 37% and Bharti Infratel slipped 13%.
The Department of Telecommunications has moved the top court seeking modification of its order asking the telecom companies to pay off their dues. The department claimed the order would adversely impact the telecom sector’s finances and hence their customers and the country’s economy. The department said the telecom firms had begun to make partial payments. It also sought that the firms not be charged penalties and interests on penalties.
In October 2019, the Supreme Court had asked telecom operators to pay tax on their non-core revenues over and above the spectrum usage charges and licence fees. It upheld the Centre’s broader definition of revenue, based on which the government calculates levies on telecom operators. Airtel and Vodafone Idea faced a combined liability of Rs 82,000 crore following the Supreme Court ruling.
At that stage, 15 entities owed the government Rs 1.47 lakh crore. Of this, Rs 92,642 crores amounted to unpaid licence fee and Rs 55,054 crore was outstanding spectrum usage charges. Vodafone Idea owed the government most – Rs 53,000 crore – followed by Bharti Airtel and the now defunct Tata Teleservices, which owed the government Rs 14,000 crore.
During a hearing on February 14, the top court had asked the managing directors and directors of the companies why contempt proceedings should not be initiated against them for failing to pay even a “single penny” to the government despite an October 2019 court judgement.
On February 20, Bharti Airtel chairperson Sunil Mittal said the payment dues related to AGR were an “unprecedented crisis” for the telecom industry. On February 29, Bharti Airtel said it had finished calculating its dues related to the adjusted gross revenue to the Department of Telecommunications, and claimed that it had paid off the amount it owed the government.