The Bombay High Court has canceled the one-time spectrum charge (OTSC) imposed by the Central Government on Bharti Airtel Limited and Vodafone Idea Limited. The court ruled that the government had no right to change the financial terms retrospectively, years after the telecom license was granted. The Division Bench of Justice Manish Pitale and Justice Shriram V. Shirsat has rejected this 2012 decision of the government and directed to return the bank guarantees of the companies. The court overturned the 14-year-old decision of the government. The bench of Justice Manish Pitale and Justice Shriram V. Shirsat completely rejected the central government’s decisions of 8 November and 28 December 2012, under which fines were imposed on telecom companies. Through these decisions, the government had imposed one-time spectrum charge on spectrum holdings above 6.2 megahertz (MHz) from July 2008. The court not only canceled the government’s demand notice but also ordered the return of the bank guarantees deposited by the telecom operators. Airtel said- Big decision for the telecom sector. The telecom industry has welcomed this decision of the Bombay High Court. Airtel spokesperson said in a statement that we welcome the decision of the Bombay High Court striking down the demand for one-time spectrum charge (OTSC). This decision will prove to be an important milestone for India’s telecom sector by eliminating legal and financial uncertainty. This will create a better environment for future investment. What was the whole controversy and the government’s argument? This whole controversy started after the Supreme Court’s 2G spectrum decision. After this, the central government decided to impose a one-time charge on old operators having spectrum in excess of the prescribed limit. The Department of Telecom (DoT) had demanded levy of this charge on spectrum holdings of more than 6.2 MHz since July 2008. The government’s argument was that operators were required to pay separately for spectrum allocation, in addition to the spectrum usage charge. Companies had given legal challenge: Bharti Airtel and Vodafone Idea had challenged this levy (tax) in the court. The companies argued that neither the Indian Telegraph Act, 1885 nor their license agreements have any provision for imposing such back-dated charges. They argued that they have already been paid through the revenue-sharing framework under the National Telecom Policy (NTP) 1999 and enhanced revenue-sharing liabilities on getting additional spectrum. It is not allowed to change the rules between contracts. The High Court accepted the arguments of the companies as correct. The court said that the telecom licenses granted under Section 4 of the Telegraph Act are entirely within the scope of the contract and the government is bound by its terms. The bench said that the government cannot be allowed to change the goal posts (rules) in the middle of the contract. The government cannot single-handedly change the financial terms of the license once both parties agree and work on the contract begins. Increasing revenue is not always in public interest. The central government had argued in the court that this charge has been imposed in public interest. Rejecting the government’s claim, the court said that merely maximizing government revenue cannot automatically be considered public interest. The court reminded that the main objective of NTP-1999 was to provide affordable telecom services, increase rural connectivity and ensure proper use of spectrum, and not to increase the government’s earnings. TRAI’s recommendations were also cited. The court also studied the recommendations of the Telecom Regulatory Authority of India (TRAI) and government committees formed from time to time. The court found that the old recommendations called for imposing one-time charge only on spectrum allocation of more than 10 MHz. No such charge was supported on spectrum holding up to 10 MHz. In this case, the operators did not have more spectrum than the prescribed limit and were already paying the increased revenue-share. This decision of Bombay High Court is different from the decision given in an old case. Earlier in 2016, the Madras High Court had upheld the government’s decision to impose similar charges in the Aircel case. However, the Bombay High Court bench disagreed with that decision of the Madras High Court. The bench said that they cannot accept that every step to raise additional revenue should be in the public interest. The government had imposed this charge without improving the license conditions. What is One-Time Spectrum Charge (OTSC)? When licenses were initially granted to telecom companies, they were allotted spectrum up to a certain limit (such as 4.4 MHz or 6.2 MHz) without any separate charges, for which they shared the revenue. Later, the government decided to impose a retrospective lump sum fee, called one-time spectrum charge, on companies holding spectrum in excess of the prescribed limit. The companies had opposed this back-dated fee. Also read this news… Only 4 subsidized cylinders will be available in Ujjwala Yojana: Till now 9 cylinders were given, the effect of increase in the price of LPG in the international market by 46%, the beneficiaries of Ujjwala Yojana (PMUY) will now get only 4 subsidized LPG cylinders instead of 9 in a year. The Petroleum Ministry gave this information on Monday. This decision has been taken in view of the continuous increase in LPG prices at the international level due to the ongoing war between America and Iran in the Middle East. Due to the war, LPG has become expensive by 46%. Read the full news…
Source link
[ad_3]
Relief to Airtel and Vodafone Idea from Bombay High Court: Government’s decision to levy one-time spectrum charge cancelled; Bank guarantee will also be returned
