Скачать или смотреть SC to consider DoT's reply after 2 weeks on telcos' pleas to rectify errors in AGR calculation

The Supreme Court has reserved its order on pleas by Bharti Airtel, Vodafone Idea and Tata Teleservices seeking to rectify Adjusted Gross Revenue demands raised by the DoT. Meanwhile, DoT has been asked to reply to claims of "arithmetic errors" in AGR calculations even as the top court reiterated its last year order which barred any recalculation of AGR dues.


Seeming inclined to dismiss pleas by telecom companies on reducing AGR demand, the 3-judge bench of Justice LN Rao, Justice SA Nazeer and Justice MR Shah will now hear the case after 2 weeks and consider DoT's reply. Telecom companies have maintained that rectification is different from reassessment or recalculation of AGR dues, claiming that DoT was hesistant to revise its raised demand or rectify errors unless allowed by the apex court.


With no fresh instructions from the DoT, Solicitor General Tushar Mehta sought a time of a few days to reply on the alleged arithmetic errors in DoT's calculations while maintaining that it may be "little hazarous" for him to make any statement as of now. Pointing to last year's verdict which had asked RCom to keep existing bank guarantees alive till the entire payment is made, he informed the court that the bankrupt telecom company was yet to comply with the order.


Claiming that they weren't blaming the DoT or seeking a review of the court verdict, telecom companies submitted that the calculated AGR demand is replete with duplication in revenue addition; errors of omission and commission and arithmetic errors which has led to double counting and inflated the AGR demand. 


Vodafone Idea has the highest total AGR liability amongst telecom companies, at over Rs. 58,254 crores. Appearing for Vodafone Idea, senior lawyer Mukul Rohatgi urged the court to allow DoT to examine the arithmetic and calculation errors which may lead to some rebate for the telecom company. Claiming that it isn't a fly-by-night operator and has a liability spread over a period of many years, Vodafone Idea sought to place all paid entries before the DoT as it maintained that many of its payments weren't reflecting in government records.


Appearing for Bharti Airtel, senior lawyer AM Singhvi maintained that the company is fully compliant with the court order and has paid over 10% of its pending AGR dues of over Rs. 18,000 cr.

While submitting that its payments and deductions not considered by the DoT were purely by oversight, the company made it clear that it can't be asked to pay the amount again due to errors.


Tata Teleservices argued that like any other tax or due, AGR has to be in line with the law. Terming "rectification" as a matter of right in any assessment or reassessment, the company told the court that the quantum of dues won't significantly be affected by reassessment. For instance, dues of Rs. 100 won't become Rs. 5, though they may reduce to Rs. 90. However, the telecom company agreed that clerical errors in such calculations are inevitable given the size of its operations and the sheer number of people involved.


In October 2019, the top court had upheld DoT's definition of AGR, and had asked telecom companies to clear dues within 3 months. Review petitions by telecom companies were rejected in January 2020, after which they had sought a longer timeline to pay AGR dues in order to avoid bankruptcy. Subsequently in September 2020, the apex court gave 10 years to telecom companies to clear pending AGR dues, and asked the NCLT to decide on spectrum sale under IBC. Court had also exempted payment on entire past dues of shared spectrum, which saved Bharti Airtel and Reliance Jio from paying AGR dues worth over Rs. 40,000 crores.
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