Major relief for Vodafone Idea, SC orders I-T Dept to pay Rs 833 crore tax refund

Major relief for Vodafone Idea, SC orders I-T Dept to pay Rs 833 crore tax refund

The Supreme Court upheld the Bombay High Court order asking Income Tax Department to issue refund of Rs 833 crore to Vodafone Idea

In a major relief to Vodafone Idea, the Supreme Court has asked the Income Tax Department to refund Rs 833 crore to the troubled telecom operator immediately. The apex court upheld an order by Bombay High Court in this regarding, quashing a special leave petition filed by the tax department against it, CNBC-TV18 reported.

The matter stems from Vodafone's refund claims for the Assessment Year (AY) 2014-15. The telco had originally sought tax refund of Rs 4,759.07 crore for assessment years 2014-15, 2015-16, 2016-17 and 2017-18. On April 29, the Supreme Court had dismissed Vodafone Idea's appeal for refunding its total claim and asked the Income Tax department to refund Rs 733 crore within four weeks.

After the apex court order, on May 28, the department had determined the net refund of Rs 833 crore. However, no refund was released despite many reminders. Following which, Vodafone Idea moved the Bombay High Court over non-issuance of refund.

Vodafone had stated that the department itself had concluded that refund worth Rs 833 crore was payable to the company and it had no power to withhold the same. The tax department, in its defence, had said that the refund was denied in view of outstanding tax demands pending against Vodafone

The Bombay High Court had ruled that the department cannot withhold the admitted refundable amount on grounds of probable tax demands arising out of the pending assessment orders. It had ordered I-T Department to issue the refund of Rs 833 crore to Vodafone within two weeks.

In its latest order, the Supreme Court also upheld that the Income Tax Department cannot withhold refunds on the basis of undetermined future refunds.

This comes as a major relief for Vodafone Idea, which has been grappling with fund shortage on the back of Adjusted Gross Revenue (AGR) payout to the Department of Telecommunications. Vodafone Idea and other telcos had sought a window of 15 years from the Supreme Court for paying their AGR dues after the apex court said that they should seek a reasonable time for payment as 20 years is too long a period. The Supreme Court bench headed by Justice Arun Mishra has reserved its orders on the time to be given to telcos for staggered paym