AGR matter in SC: Dispute with PSUs old, DoT to clarify

By: |
June 14, 2020 5:30 AM

Expressing its displeasure during a hearing on the matter on Thursday, a bench led by Justice Arun Mishra said the original order pertained to the telecom operators and did not apply to the PSUs and, therefore, any demand raised on them was ‘totally impermissible’.

The bench also warned of action against the DoT official responsible for issuing demand notices to the PSUs.The bench also warned of action against the DoT official responsible for issuing demand notices to the PSUs.

Jolted by the Supreme Court’s ire that its order on the adjusted gross revenue dues was ‘misused’ to issue demand notices to the tune of Rs 4 lakh crore to a clutch of non-telecom PSUs, the department of telecommunications has gone into damage control mode.

Since the SC has asked it to reconsider the demands on the PSUs and file a reply by Monday, the DoT is contemplating clarifying to the apex court that the demand notices issued to the PSUs were not a result of the October 2019 order, but an ongoing process, as the dispute it had with telecom operators on the definition of AGR also applied to these PSUs. No action was taken since the matter was sub-judice.

Expressing its displeasure during a hearing on the matter on Thursday, a bench led by Justice Arun Mishra said the original order pertained to the telecom operators and did not apply to the PSUs and, therefore, any demand raised on them was ‘totally impermissible’.

The bench also warned of action against the DoT official responsible for issuing demand notices to the PSUs.
“Even after our clarification, if the SC reiterates its wish to withdraw the notices to PSUs, we may seek the Cabinet’s view on how to move ahead,” officials said.

The SC bench asked the DoT to withdraw the demand and gave it three days to file a reply.

The DoT felt that though the deadline to pay the AGR dues was not applicable to non-telecom PSUs, since they were not party to the case, the judgment applied to all licencees that have taken any kind of licence/spectrum from it. Based on this understanding, DoT started issuing fresh demand notices to PSUs after the October 24, 2019, order of the Supreme Court.

The SC, in October 2019, ruled in favour of the government, stating that the entire revenue of a licensed telecom operator should form part of AGR. Using this judgment, the DoT issued notices to a clutch of PSUs also whose core operation was not telecom but had some form of telecom licence and spectrum for a part of their operations. Since the PSUs concerned, like Railways, PowerGrid, Oil India, Gail, etc, had taken telecom licences under the name of the flagship company rather than their telecom operations subsidiary, the DoT applied SC’s logic that their entire revenue (including of the flagship firm) should be taken into account for calculating the AGR.

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