SC asks DoT to reconsider Rs 4 lakh crore claim on PSUs, says demand impermissible

The Supreme Court on Thursday ordered the Department of Telecommunications (DoT) to reconsider seeking Rs 4 lakh crore in past dues from non-telecom PSUs such as GAIL, saying raising such a demand using its verdict on dues of telecom companies was "totally impermissible".

It also asked telecom companies, including Bharti Airtel and Vodafone Idea Ltd, to file affidavits explaining the time needed by them to clear the remaining statutory dues that arose from the court verdict of including non-telecom revenues for calculating dues to the government.

A bench of Justice Arun Mishra, S Abdul Nazeer and M R Shah sought the government's response on guarantees that can be sought to ensure telecom companies abide by a timeframe and payment schedule.

"Our judgment could not have the basis for demands on PSUs," the bench observed. "We would request you (DoT) to withdraw this otherwise we will take strict action."

"This is wholly and totally impermissible," it said while referring to the demand raised against the PSUs.

Following the apex court's October 2019 verdict on the adjusted gross revenue (AGR) to be used for calculating government dues such as license fee and spectrum charges, the DoT had sought Rs 4 lakh crore in past dues from gas utility GAIL India Ltd, electricity transmission firm PowerGrid, Oil India Ltd, Delhi Metro, and others.

The state-owned firms challenged the demand saying telecom wasn't their core business and revenue from licences such as ISP formed a meagre part of their revenue.

Solicitor General Tushar Mehta, appearing for DoT, told the bench that the department would file an affidavit explaining as to why the AGR demands were raised against the PSUs.

On the government request for allowing telcos up to 20 years to pay the remaining Rs 93,520 crore in AGR dues, it sought to know the rationale for such a long time period and wanted to know what guarantees the company and their directors can provide.

The court will hear the case next on June 18.

After the apex court rejected pleas by Vodafone Idea, Bharti Airtel and Tata Teleservices seeking review of the October 24 verdict that widened the definition of AGR by including non-telecom revenues as well as condoned reopening of dues payable by doing self-assessment, the DoT had in March moved a plea seeking staggered payment over 20 years of dues.

The plea also asked that telcos not be charged a penalty and interests on penalty and principal beyond the date of the judgement.

During the hearing conducted through video-conferencing on Thursday, Mehta told the bench that the government has extensively examined the issue of AGR dues and it would be difficult for the telecom companies to pay the amount in one go.

The bench asked the DoT about the time frame within which the telecom companies would pay the AGR dues.

Mehta told the bench that telecom firms should give an undertaking on the issue of payment of dues.

The bench questioned the demand raised against PSUs and said that its verdict had not dealt with this issue.

When Mehta said that PSUs held the telecom spectrum, the bench asked why no such demands were made earlier from them and how it was made after the apex court's verdict.

Mehta, however, said PSUs need to be treated differently as they are class in itself and discharge government functions and they are not providing mobile services like other telecom providers for commercial means.

Observing that the DoT has misinterpreted its judgment, the bench asked Mehta to explain why the "totally impermissible" demand of Rs 4 lakh crore has been raised against PSUs.

"We want them to file an affidavit how this could be done by them? We will punish them," the bench observed.

Mehta urged the bench to clarify that the AGR verdict does not apply to PSUs.

The bench, which posted the matter for hearing on June 18, also asked the telecom companies to file affidavits on how will they pay the dues.

At the fag end of the hearing, the bench asked the telecom companies as to whether they have contributed to the relief funds for COVID-19.

The advocates appearing for the private telecom companies apprised the bench that these firms have contributed towards COVID-19 relief including in the PM CARES Fund.

Of the Rs 43,980 crore dues, Bharti Airtel has paid Rs 18,004 crore. Vodafone Idea has paid only Rs 6,854 crore out of its dues of Rs 51,400 crore. Tata Group has paid Rs 4,197 crore out of due of Rs 16,788 crore.