The Supreme Court on Monday said that it may order the cancellation of spectrum allocation to telecom companies in case they are not willing to pay their adjusted gross revenue or AGR dues to the government, PTI reported.
The top court bench, comprised of Justices Arun Mishra, S Abdul Nazeer and MR Shah, also said the Centre must cancel the spectrum licenses of telecom companies, if it feared that the AGR dues may be wiped off.
“The government should move to cancel the license, spectrum if dues are being wiped out,” Justice Mishra said, according to The Economic Times. “If telcos are unwilling to pay, we will directly cancel spectrum allocation.”
The bench, however, reserved its verdict on whether telecom companies facing insolvency and bankruptcy proceedings can sell spectrum rights. The top court also said that it will decide whether there are any additional liabilities on Jio and Airtel, which have spectrum-sharing agreements with with Reliance Communications and Aircel and Videocon.
The top-court observed that spectrum-trading guidelines mandated that sellers must clear any pending dues before sale. In case they do not clear the dues, they get transferred to the buyer. The bench added that telecom companies cannot expect to clear their dues by acquiring someone else’s property without any attached liability
Solicitor General Tushar Mehta, who is representing the Department of Telecommunications in the case, told the top court that the government can seek AGR dues from both the buyers and sellers of spectrum rights, jointly or individually.
In October, 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.
The Centre had had asked the Supreme Court for a 20-year-period to recover adjusted gross revenue or AGR dues from the telecom companies. In March, court had refused to consider modifications to its previous order. “There can be no further exercise regarding dues payable,” the court had observed. “Even telecom companies should not have any further litigation regarding dues payable.”