Supreme Court Dismisses Telecom Companies' Pleas To Recompute AGR Dues

The Supreme Court on Friday rejected the pleas of telecom companies seeking recomputation of the Adjusted Gross Revenue (AGR) dues demanded by the Department of Telecommunications (DoT).

A bench comprising Justices L Nageswara Rao, S Abdul Nazeer and MR Sha pronounced the order dismissing the applications filed by Vodafone Idea, Bharti Airtel and Tata Teleservices.

The bench had observed that reassessment was prohibited in view of an earlier order passed on July 20 last year.

Though the applications by telcos "appear to be innocuous at first blush, the end result of the relief sought in the guise of correction or rectification of the defects or arithmetical errors in calculation of AGR dues, would be recalculation....", the order said.

In September last year, the Supreme Court had permitted the telecom companies to pay off the AGR dues in a staggered manner over 10 annual installments, starting from April 1, 2021. In the same order, the Supreme Court had prohibited any sort of re-assessment of the AGR dues.

Later, the three telecos moved the Court alleging that there calculation errors in the dues computed by the DoT.  Senior Advocates Mukul Rohatgi, Dr Abhishek Manu Singhvi and Arvind Datar, appearing for Vodafone-Idea, Bharti Airtel and Tata Teleservices respectively, argued that the earlier order did not bar correction of calculation errors. The order only bars reassessment and does not bar rectification of calculative errors, they had argued.

The issue arises from the interpretation given by the Supreme Court in its October 2019 judgment to the term "Adjusted Gross Revenue" in the spectrum licensing agreements between telecom companies and the DoT. The license fee is computed based on AGR. The Supreme Court held that 'AGR'  includes revenue from non-telecom operations of the companies like rent, profit on sale of fixed assets, dividend and treasury income. This resulted in an additional liability to the tune of Rs 92,000 crores on the telecom companies collectively.

Case Details

Title :Union of India vs Association of Unified Telecom Service Providers of India and others

Coram : Justices L Nageswara Rao, S Abdul Nazeer and MR Shah

Citation : LL 2021 SC 322

Click here to read/download the order