Voda-Idea to get Rs 833 cr refund as SC rejects govt plea against HC order

The refund was held back by I-T department citing possible future demands, Bomaby HC had ruled the power to do so did not exist in AY 2014-15, to which the case pertains

In a relief to Vodafone Idea, the Supreme Court (SC) on Wednesday dismissed the petition filed by the finance ministry against the Bombay high court order that had directed the revenue department to refund Rs 833 crore to the cash-strapped telecom company. The refund was held by the income tax (I-T) department citing possible future demands.

Earlier this month, the high court had ruled that such a power did not exist at the time of the assessment year 2014-15, to which the case pertained. The revenue department filed a special leave petition against the high court order in the apex court.

“It has to be noted that now we have Section 241A under the I-T Act, which gives such power to tax officers. However, that section was not applicable to the year in question (2014-15 assessment year),” said Amit Maheshwari, tax partner at AKM Global, consulting firm.

The refund amount increased from Rs 733 crore to Rs 833 crore after rectification.

This relief is, however, a drop in the ocean for Vodafone Idea, which is grappling with a huge AGR (adjusted gross revenue) payment. 

The SC has ordered the company to pay Rs 50,399 crore as AGR payments, according to the assessment done by the Department of Telecommunications (DoT).

On Monday, the SC struck down the telecom companies’ demand seeking reassessment of the AGR dues by the DoT. The telelcom firm had pleaded with the SC saying that the huge AGR payout would force the company to shut operations, which would have a bearing on its 11,000 employees.

The SC on October 24, 2019, upheld DoT’s definition of AGR, ending the 14-year-old legal battle between telecom operators and the government. On June 11, the apex court had directed Bharti Airtel and Vodafone Idea to file a reply on the payment road map, time frame, and securities.

The share of Vodafone Idea rose 2.65 per cent to close at Rs 8.53 on the BSE on Wednesday. The telecom firm, which still needs to pay over Rs 51,000 crore to the government as AGR, has got some relief this way.