- The Bombay HC struck down the Centre's retrospective one-time spectrum charge on Airtel and Vodafone Idea
- The court quashed 2012 government decisions and related demand notices against the telecom firms
- Judges ruled government lacked statutory power to alter telecom licence financial terms retrospectively
The Bombay High Court struck down the Centre's one-time spectrum charge imposed on Bharti Airtel Ltd. and Vodafone Idea Ltd., ruling that the government could not retrospectively alter the financial terms of telecom licences years after they had been granted.
A division bench of Justice M.S. Sonak and Justice Jitendra Jain set aside the government's 2012 decisions introducing the levy and quashed the consequential demand notices issued to the telecom operators. The court also directed authorities to return the bank guarantees furnished by the companies pursuant to interim orders.
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The dispute arose after the Department of Telecommunications sought to levy a one-time charge on spectrum holdings beyond 6.2 MHz, with the policy announced in 2012 but made applicable retrospectively from July 1, 2008. Airtel had disclosed a demand of Rs 5,201 crore, while Idea Cellular had separately disclosed a retrospective demand of about Rs 1,069 crore.
In its judgment, the court held that the Centre had failed to establish any identifiable statutory or contractual power to retrospectively impose such a charge. The bench observed that telecom licences were contractual arrangements and the government could not unilaterally rewrite their financial terms after operators had accepted and acted upon them.
The judges further held that the operators had already paid consideration for the spectrum through the revenue-sharing regime under the National Telecom Policy, 1999, and that imposing an additional levy years later amounted to changing the bargain after the fact.
The judgment said revenue maximisation could not, by itself, be equated with public interest and rejected the government's contention that the levy was justified on that ground.
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The bench also disagreed with the view taken by the Madras High Court in a similar matter, holding that the retrospective demand lacked legal backing and could not be sustained.
It noted that recommendations of the Telecom Regulatory Authority of India had contemplated a one-time charge only in limited circumstances and did not support the levy imposed on spectrum holdings up to 10 MHz.
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