The Income Tax department has to refund taxes to the tune of 833 crore to Vodafone Idea, the Supreme Court maintained today in an order that brought relief to the cash-strapped telecom major which is already struggling to pay its AGR dues. Vodafone Idea has paid around Rs 7,854 crore of its AGR (adjusted gross revenue) dues, it still owes Rs 50,399 crore to the government.
The tax department had argued that the refund be adjusted against the dues but the Supreme Court upheld the Bombay High Court order and dismissed the government's appeal.
The two-judge bench of Justices UU Lalit and Vineet Saran at the Supreme Court said the IT Department does not have power to withhold refund in anticipation of future demands.
On June 26, following an appeal by Vodafone Idea for a refund of more than Rs 1,000 crore, the Bombay High Court had asked the Centre to return Rs 833 crores. The payment has to be made within two weeks, the court had said.
A Division bench of Justices RD Dhanuka and Madhav Jamdar observed that tax authorities cannot adjust self-admitted refund amount against the tax dues "which are not even adjudicated upon by the respondents and may arise in future as contemplated/visualized by the respondent."
Vodafone Idea, along with Bharti Airtel and Tata Telecom owe the government around Rs 1.6 lakh crore in AGR. The telcos had initially asked for a 20-year window to clear the dues -- a time period that the government has also agreed to. But the top court has said during the lockdown period, the telecom firms are the only ones to make profit and need to pay their dues immediately.