SC draws the line for DoT and telcos on AGR self-assessment

Anil Kumar

The Supreme Court, in its latest order on March 18 2020, set aside the Department of Telecommunications’ (DoT) plan to get six months more to evaluate the self-assessment of the dues linked to AGR (adjusted gross revenues) payable by telecom companies.

The DoT knew that the three-judge bench headed by Justice Arun Mishra, which delivered the AGR verdict on October 24, 2019, is retiring on September 2 this year, and if the case is dragged on for the next six months, a new bench will be formed, where the telcos may have better chances of getting substantial relaxations in dues.

This is DoT’s third failed attempt. It had issued a “no coercion” order on January 23, only to be withdrawn immediately after the court’s order of February 14. Around the same time, the DoT issued irrational demand notes to certain non-telecom PSU companies such as PowerGrid, ONGC and the like, with the hope that when the court gives them some relief, the benefit of the same can be passed on to the incumbent telcos as well. The court junked these pleas, too.

Already seven months have passed since the October 2019 judgment, but it appears that the DoT is not interested in calculating dues. The figures submitted to the apex court of about Rs 1,69,049 crore dues (Please see table) are for 2016-17. The DoT has not made any efforts to calculate the dues for the previous two financial years (FY18 and FY19) and three quarters of FY20. On the other hand, it is just relying on the self-assessment figures provided by the telcos, which is a meagre sum of Rs 37,175 crore as against Rs 1,69,049 crore demand till FY17.

The court has clearly ruled out self-assessment. In its March 18, order, the court said, “We are of the conclusive opinion that no self-assessment / re-assessment can be done. When we decided the case bills were raised and (the) amount was crystalized… reopening of the same is not at all permissible.”

The court also took strong objection to false propaganda by incumbent telcos claiming that a sudden heavy burden has been imposed by the October 2019 judgment. The top court said the case was decided way back in 2011. The court in its March 18 order said, “We take note of the situation that every day incorrect stand in derogation to order is being taken up and full attempt is being made by projecting that all of a sudden, this court has imposed certain dues. As a matter of fact, this court has in its previous judgment dated 11.10.2011, in the same case, settled the propositions and only for limited purpose, the case was sent back. Thereafter, bills were raised and dues were before us, we settled the issues finally and at the same time, ordered that there shall not be any further exercise.”

The court added, “There is no authority with any company to enter into self-assessment/re-assessment and to reopen the dues which have been settled finally by this court.”

It further stated: “There are serious kinds of violations which have been committed by the companies. We do not appreciate at all the way in which they are acting. In case they indulge in it any further, their managing director shall be personally responsible for further violation of the court’s order.”

The court passed the above orders in an application moved by the DoT to grant 20 years to the companies to pay their AGR dues with 8 per cent interest. The court will consider this after two weeks.

Anil Kumar is the Editor-in-chief of Telecom Live and founder of Telecom Watchdog, an NGO. Views are personal.