Shares of telecom companies declined as much as 40 per cent on Wednesday after the Supreme Court said that the self-assessment of adjusted gross revenue (AGR) dues by the firms or the Department of Telecommunication (DoT) may amount to contempt of court.
Among individual stocks, Vodafone Idea tumbled 40 per cent to Rs 2.91 per share. At 11:35 am, the stock was trading 25.36 per cent lower at Rs 3.62 as compared to 2.06 per cent fall in Sensex. Bharti Airtel fell as much as 5.03 per cent to Rs 431.25 after rising 4.28 per cent to Rs 478.40 immediately after the SC hearing. Moreover, Bharti Infratel slipped 16.6 per cent to Rs 161.75 and Reliance Industries gave up its day's gains and fell 1.5 per cent to Rs 993.60.
A Supreme Court Bench, comprising Justices Arun Mishra and M R Shah, expressed its displeasure over the DoT's plea seeking to allow telecom operators to make a staggered payment of their AGR dues.
"Self-assessment by DoT is sheer violation of our orders, sheer contempt," Justice Arun Mishra remarked, according to Live Law. "Who permitted self-assessment? CAG audit has to be done. This is in contempt of our orders". Mishra said the Court could not permit another round of litigation on the AGR issue.
To the assertion of Solicitor General Tushar Mehta, who is appearing for the DoT, that there was no reassessment of dues and that only an extension of time was sought, Justice Mishra said: "If this is the attitude of the government, we shall recuse ourselves."
“We cannot allow encroachment of SC judgment. If we allow these pleas, SC will be party to a fraud. We say with all responsibility that we cannot allow reopening,” the court observed.
Earlier this week, the government had approached the apex court seeking approval to a formula allowing telecom service providers to pay their unpaid or remaining AGR dues in annual instalments over the next 20 years or more.
The plea had stated that telecom service providers liable to make payments had started making payments and the part payment was made arising out of AGR dues.