SC rejects govt plea against Bombay HC order; Voda-Idea to get Rs. 833 crore tax refund

The Supreme Court on July 22 dismissed the petition filed by the Income Tax (IT) Department against the Bombay High Court order that had directed the department to refund Rs. 833 crore to Vodafone-Idea.

The tax refund was held by the IT department citing possible future demands.

The Bombay High Court, in its judgment, had ordered the IT department to refund the amount—tax refund for assessment year 2014-15—to the mobile operator in two weeks. The Bombay High Court had ruled that such a power did not exist at the time of the assessment year 2014-15, to which the case pertained against which the IT department filed a Special Leave Petition with the Supreme Court.

In April, the Supreme Court had in a larger tax dispute involving Rs. 4,500 crore ordered the tax department to refund Rs. 733 crore in four weeks for assessment year 2014-15.

According to the IT department, Vodafone Idea owed Rs. 864 crore in tax dues for various assessment years between 2000-01 and 2018-19. And it proposed to the telecom operator that this refund be adjusted against other pending demands.

Vodafone Idea moved the Bombay High Court seeking release of the amount contending that since the refund order was already passed, it should not be held back by the IT Department. The High Court agreed with the telecom operator and granted relief which was later challenged by the IT Department with the Supreme Court.

On July 20, the Supreme Court struck down the telecom companies’ demand seeking reassessment of the AGR dues by the Department of Telecommunications (DoT). The cash strapped firm had pleaded with the Apex Court citing that the huge AGR payout would force the company to shut its operations across the country, which would have a bearing on its 11,000 employees.