Vodafone Idea (VIL) has filed an amended petition in the Supreme Court, seeking a waiver of interest and penalty on its adjusted gross revenue (AGR) dues, while also requesting a recalculation of AGR liabilities, citing earlier cases where similar demands were accepted.
The petition, dated September 18, argues that the disputed components of the AGR dues are yet to be finalised, while the telecom operator has already paid all undisputed amounts on a self-assessment basis.
The Supreme Court last Friday deferred the hearing on the matter to October 6.
A query sent to Vodafone Idea didn't elicit any response.
Vodafone Idea, in its amended petition, argued that it cannot be held in default over AGR dues until the principal amount is reconciled and finalized. “The Hon’ble Supreme Court, for the first time, directed inclusion of the disputed heads in the computation of AGR. Hence, till date, it cannot be said that there was any default warranting imposition of penalty,” the company submitted.
The telco noted that both the Department of Telecommunications (DoT) and the company agree that the dues require reconciliation, correction, and finalisation. “Until the principal amount payable is crystallised and finalised, the petitioner cannot be said to be in default requiring payment of penalty,” Vodafone Idea added.
During last week’s hearing, the Centre said it does not oppose VIL’s plea on adjusted AGR dues but noted that a solution was needed since the government is also an equity holder in the company. The bench, comprising Chief Justice B R Gavai and Justices K Vinod Chandran and NV Anjaria, was hearing VIL’s fresh plea against the Department of Telecommunications’ (DoT) demand of Rs 5,606 crore for FY 2016-17.
VIL argued that these dues were already “crystallised” by the 2019 AGR judgment and could not be reopened. Solicitor General Tushar Mehta, representing the Centre, sought an adjournment to October 6.
As part of its plea, Vodafone Idea cited the Supreme Court’s July 2024 judgment in Mineral Area Development Authority vs. Steel Authority of India, where the court ruled that Parliament lacked legislative competence to tax mineral rights and consequently waived interest and penalties on pre-July 2024 demands. The company argued that the same principle should extend to AGR dues and urged the court to treat the Mineral Area case as a precedent for waiving interest and penalties.
The case traces back to the Court’s March 18, 2020 order, which upheld AGR dues up to FY17 as calculated by DoT and barred any reassessment by operators. Despite this, DoT has raised fresh claims for FY18 and FY19. VIL contends that much of the new demand overlaps with periods already settled by the Court.
The government now holds 48.99% of Vodafone Idea, having converted Rs 53,083 crore of dues into equity in two tranches (February 2023 and April 2025).
Of the Rs 9,450 crore fresh demand, Rs 2,774 crore is against Idea Group and Vodafone Idea (post-merger), while Rs 6,675 crore is directed at Vodafone Group for the pre-merger period.
VIL already owes around Rs 83,400 crore in AGR dues, with annual instalments of Rs 18,000 crore starting March. Including penalties and interest, the company’s total liabilities to the government are estimated at nearly Rs 2 lakh crore.
In its petition, Vodafone Idea asked the Court to quash DoT’s fresh claims for FY17 and earlier and order a full reconciliation of AGR dues, noting that these periods had already been settled by the 2020 order. The Supreme Court had earlier stressed the need for finality in proceedings and deferred the plea to September 26.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
