Turmoil in DoT

Turmoil in DoT

The government and the telecom sector were locked in a legal fight for 14 years over the payment disputes centered on the definition of AGR. The companies had contested DoT’s claim that items like dividend, rent and interest were part of AGR, and hence, the companies needed to include them while calculating their taxes.

Supreme Court three member bench of Justice Arun Mishra, A.A. Nazeer, and M.R Shah, heard the matter and on Oct 24, 2019, and gave its verdict. The apex court agreed with the DoT’s definition of AGR, bringing an end to the prolonged dispute between the government and telecom companies on the definition of AGR.

The Apex Court had upheld the telecom department’s demand that wireless carriers pay Rs 92,000 crore in overdue levies and interest, giving the mobile operators three months to comply with the order. Following the judgment, Bharti Airtel and Vodafone Idea tried, in vain to persuade the DoT to relax the deadline for payment of dues.

After the top court’s Oct 24, 2019 order both Bharti Airtel and Vodafone-Idea filed a review petition. The matter was taken by the Supreme Court and on Thursday, January 16, 2020 and the bench gave its verdict: “Having perused the review petitions and the connected papers with meticulous care, we do not find any justifiable reason to entertain the review petitions. The review petitions are, accordingly, dismissed.” Court directed the telecom operators to pay ₹1.47-lakh crore in past statutory dues of adjusted gross revenue (AGR) by January 23.

Notwithstanding a clear directive in the verdict DoT failed to pass any order to Telecom operators for payment as directed by the Apex Court. Moreover, the Telecom operators too ignored the directive and rather filed a modification plea before the Supreme Court on Monday, Jan 21.The matter was mentioned before a bench headed by Chief Justice S.A. Bobde on Tuesday, Jan 22, just before the last day of the payment dead line. The Court listed the matter for later date. The court, however, did not comment on the status of the original payment deadline.

This left DoT with no room to seek any clarification from the Court. Hence the department, through its desk officer, issued an order asking the Accountant General not to insist on the payment and not to take any coercive action against telecom operators. This action of the DoT’s desk officer effectively stayed the operation of the apex court Oct 24, verdict. (PTI)

Modification plea, listed on Jan 20, 2020, was taken for hearing on Friday Feb14, 2020, by a three-judge bench of Justice Arun Mishra, Justice S Abdul Nazeer and Justice M R Shah.

Heading a three-judge bench, Justice Arun Mishra launched into a furious tirade pulling up both the companies and the Department of Telecom (DoT) for violating its order mandating January 23 as the deadline for payment of Rs1.47 lakh crore in AGR dues.
“We have dismissed review plea in adjusted gross revenue case, but still not a single penny has been deposited… Is this not about money power?” thundered Mishra. The SC’s anger was directed in large part toward the DoT’s order asking AG not to take any coercive action against non-compliant Telecom operators.

“A desk officer is sitting in appeal over our orders! If a desk officer has the audacity to stay a Supreme Court order, then let’s wind up the Supreme Court!” said Mishra.
The officer’s “temerity” in passing the order was “nothing but a device to scuttle” the SC’s direction, the bench observed. “Who is sponsoring all this? At whose behest he did this? Should we say this officer was hand in gloves with those who didn’t want to pay?” Mishra asked.

The hearing culminated in the SC drawing up a contempt of court proceedings against the DoT officer and directing the directors of non-compliant telcos to show cause by the next hearing on March 17 as to why similar action should not be taken against them.

“We draw contempt against companies. Let the desk officer also explain why appropriate action should not be taken, and he should be present on the next date of hearing. Please ask the desk officer to withdraw that DoT order or he will go behind the bars by evening. We have to take action against him. The officer should understand where they should stop. It is clear contempt,” the court said.

Hours after receiving the rap from the apex court, DoT withdrew its January 23, order which restrained action against any of the companies who fail to pay up dues by the Supreme Court-mandated deadline of January 23. The direction by the DoT says its previous order dated January 23, 2020, “stands withdrawn with immediate effect.”

The DoT had issued a stringent order to telecom operators to pay by Friday midnight. “You are hereby directed to make the payment of outstanding dues of licence fee and spectrum usage charges by 14-02-2020, 11:59 pm positively,” said a notice issued.
However, none of the companies made the payment on February 14 and it is informed that Airtel and Vodafone Idea may make the payment for AGR dues on Monday Jan 17, to avoid stringent punitive action from DoT. (PTI)

Obviously the government has taken a serious view of the matter and stringent action was being considered against those found guilty. Some heads may be rolling in the near future to shield the government from the mesh.