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

New Delhi: The Supreme Court on Thursday asked the Department of Telecommunications (DoT) to reconsider within three days its demand 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".

The apex court also asked telecom companies, including Bharti Airtel and Vodafone Idea Ltd, to file affidavit 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 Justices Arun Mishra, S Abdul Nazeer and M R Shah asked the government about the 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, adding, "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 licence 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 was not their core business and revenue from licences such as ISP formed a meagre part of their revenue.

The bench asked Solicitor General Tushar Mehta, appearing for the DoT, as to how the demand was raised against PSUs on the basis of its verdict when the licences were different. The judgment never dealt with the issue and their agreements are quite different, it added.

"In the circumstances, let the Department of Telecom reconsider the demand that has been sprung, within three days from today, and on the next date of hearing report the compliance of the action taken on the basis of this order," the bench said in its order.

"It is apparent that the licences are different and our judgment in this case could not have been made the basis for raising the demand against Public Sector Undertakings. Even otherwise, the Public Sector Undertakings are not in the actual business of providing mobile services to the general public," the bench said.

The bench also dealt with the issue of reasonable time to be fixed as per a plea by the Centre for payment of dues by concerned telecom firms.

"There are several issues which are to be considered. Firstly, the reasonable time-frame, secondly, how to ensure the payment of the amount even within that time-frame and what kind of securities, undertakings and guarantees should be furnished to ensure that the amount is paid by the Telecom Service Providers," it said.

"Time was prayed on behalf of the Telecom Service Providers to file a joint affidavit with respect to their proposal to secure the amount, which is to be paid under the orders passed by this Court. Let a joint affidavit be filed within five days from today. List the matters on June 18," the bench said in its order.

Mehta told the bench that the DoT 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 companies and their directors can provide.

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

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 timeframe within which the telecom companies would pay the AGR dues.

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

When Mehta said the 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 a 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 and misused 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.

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.

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