New Delhi, Oct 27 (PTI) In a significant development, the Supreme Court on Monday permitted the Centre to reconsider and reconcile Vodafone Idea Ltd’s pending adjusted gross revenue dues amounting to Rs 5,606 crore for the financial year 2016–17, observing that the issue falls within the policy domain of the government.

Adjusted gross revenue (AGR) is the income figure used to calculate the licence fees and spectrum charges that telecom companies must pay to the government.

A bench comprising Chief Justice B R Gavai and Justice K Vinod Chandran passed the order while hearing a writ petition filed by Vodafone Idea challenging fresh AGR-related demands raised by the Department of Telecommunications (DoT).

The telco contended that these additional claims were unsustainable as the liabilities had already been crystallised by the apex court's 2019 judgment on AGR dues.

During the hearing, Solicitor General Tushar Mehta, appearing for the Centre, informed the court that the government now holds 49 per cent equity in Vodafone Idea, and that around 20 crore consumers depend on its services.

He submitted that given these circumstances, the Centre was willing to examine the issues raised by the company to ensure that consumer interests are safeguarded.

The bench noted that the petition has been filed seeking the quashing of additional AGR demands for 2016-17, and further directions to comprehensively reassess all dues.

“The solicitor general on instructions states that taking into consideration the change in circumstances, i.e., the Centre acquiring 49 per cent equity and 20 crore customers utilising the service of the petitioner, the Union (government) is willing to examine the issues raised by the petitioner (company),” the bench said.

“Taking into consideration the status of the case now -- the government has infused substantial equity into the company and that it will have direct bearing on 20 crore customers -- we see no issue in the Union reconsidering the issue and taking appropriate steps,” the CJI said in the order.

Clarifying that the issue fell under the policy domain of the Union, the bench said, “There is no reason as to why the Union should be prevented from doing that, and with that view of the matter, we dispose of the writ petition.” Senior advocate Mukul Rohatgi, appearing for Vodafone Idea, argued that the DoT’s additional demand of Rs 5,606 crore for FY 2016-17 was unsustainable since the dues had already been determined following the Supreme Court’s 2019 verdict.

The dispute over AGR, particularly its inclusion of non-telecom income, led to massive liabilities on the telecom operators, with Vodafone Idea and other telcos among the hardest hit.

Vodafone Idea had filed a fresh plea against the DoT's demand of Rs 5,606 crore relating to 2016-17, which was disposed of on Monday by the bench, permitting the Centre to reconsider the issue.

Earlier, the Centre said that efforts were underway to arrive at a resolution with the company.

Mehta said the government held 49 per cent equity in Vodafone Idea, making it a direct stakeholder in the operator's survival.

"Some solution may have to be found out, subject to your lordship's approval. If it can be kept next week, we can think of some solution," Mehta had said.

Dodafone Idea had sought a direction to the DoT to "comprehensively re-assess and reconcile all AGR dues for the period up to FY 2016-17 following the 'Deduction Verification Guidelines' dated February 3, 2020.

Earlier this year, in a setback to telecom majors, including Bharti Airtel and Vodafone Idea, the apex court refused to review its 2021 order rejecting their pleas for rectification of alleged errors in the calculation of AGR dues payable by them.

The telcos argued that arithmetical errors in the calculation should be rectified and that there were cases of duplication of entries.

In September 2020, the top court fixed a time frame of 10 years for telecom service providers struggling to pay Rs 93,520 crore of AGR-related dues to clear their outstanding amounts to the government.

It said telecom operators should pay 10 per cent of the total dues as demanded by the DoT by March 31, 2021, and the remaining amount would be paid in yearly instalments from April 1, 2021, to March 31, 2031.

The top court, which held the demand raised by the DoT with respect to AGR dues as final, said there should neither be a dispute raised by the telecom companies, nor any re-assessment.

The apex court delivered its verdict on the AGR issue in October 2019.

The DoT had moved a plea in the top court seeking staggered payment of the dues by telcos over 20 years.

Earlier, AGR included both telecom revenue and non-telecom income (like interest from deposits or asset sales).

In 2021, the rules were relaxed to exclude non-telecom income of AGR, reducing the financial load on the operators. PTI SJK ARI