Vodafone Idea seeks waiver of penalty and interest on AGR dues in SC

Vodafone Idea has filed an amended petition in the Supreme Court seeking waiver of penalty, interest and interest on penalty on its adjusted gross revenue dues

Vodafone Idea, India’s third-largest telecom services provider, on Monday asked the Supreme Court to exempt it from paying penalties, interest, and interest on penalties on adjusted gross revenue (AGR) it owes the government. 

 

The demand has been raised through an amendment to its earlier petition earlier this month in which it had challenged the additional AGR of ₹9,450 crore till 2018-19 (FY19). Of that ₹5,606 crore was what had accrued till FY17 on the basis of a recalculation.

 

The amended petition, seen by Business Standard, seeks waiver of interest and penalties on grounds that the Department of Telecommunications (DoT) was not clear about the amount of AGR. 

 

 

The telco added in its petition that the DoT had told the court that the AGR, inclusive of the penalties, interest and interest on penalties, could be further revised on the basis of its own assessments, audits by the Comptroller and Auditor General, and special audits, besides court cases. 

 

“It is well settled that where the amount payable is in dispute or not crystallised or not ascertained, and the parties are under a mistake of fact of the exact quantum, penalty cannot be levied,” the telco said, citing Para 25(c) of the Mineral Area Development Authority vs. Steel Authority of India case. 

 

It added it had paid the undisputed AGR on the basis of a self-assessment, and hence the matter before the court in 2020 was only regarding the shortfall.

 

It further added since it had made the payments, there was on question on penalties on non-payment.  

 

According to the DoT, Vodafone Idea is liable to pay ₹58,254 crore, including interest, penalties, and interest on penalties, calculated up to FY17.  

 

This is the second time Vodafone Idea has approached the apex court on this issue. In May this year, a Bench of Justice J B Pardiwala and Justice R Mahadevan had rejected the writ petitions filed by Vodafone and two other telecom companies, which sought a waiver of interest, penalties, and interest on penalties.

 

This was a review petition following the court’s decision in 2020, when it had rejected reviewing an reassessment of the dues, asking telecom companies to pay AGR, including interest, in instalments over 10 years starting September 2021. The dues of Vodafone Idea -- of ₹58,254 -- were locked at that time.  

 

Queries to Vodafone Idea did not elicit a response as of Monday evening.

 

The telco’s petition, filed on September 9, is up for hearing on October 6, after the Centre sought more time from the court but noted that “some solution has to be found” regarding the fresh plea during the last hearing on September 19.  

 

Appearing for the Centre, Solicitor General Tushar Mehta said that the central government had become a major shareholder in Vodafone Idea. 

 

“The government has also infused 50 per cent equity. So we are stakeholders. A solution may have to be found, subject to your lordships' approval. If it can be kept next week, we can think of some solution,” Mehta had said.

 

A Bench led by Chief Justice of India B R Gavai, along with Justice K Vinod Chandran and Justice N V Anjaria, is hearing Vodafone’s writ petition.

 

At present, Vodafone Idea’s dues to the government have risen to ₹83,400 crore. Of this, interest, penalties, and interest on penalties total ₹45,000 crore. It is expected to begin making annual payments of ₹18,000 crore from March next year.