SC refuses to stay Bombay HC order quashing ₹3,300 crore one-time spectrum charge on telcos

The Supreme Court on Friday refused to stay a Bombay High Court order that had quashed the Centre’s demand for one-time spectrum charges from telecom companies including Bharti Airtel and Vodafone Idea for spectrum held beyond 6.2 MHz between 2008 and 2012.

A bench of the Supreme Court issued notice to the telecom companies on the Centre’s appeal against the High Court judgment. Appearing for the government, Additional Solicitor General Vikramjit Banerjee said the dispute involved around ₹3,300 crore.

Senior advocates Mukul Rohatgi and Shyam Divan appeared for the telecom companies.

The Bombay High Court had earlier set aside the Department of Telecommunications’ (DoT) December 28, 2012 decision and subsequent demand notices imposing the one-time spectrum charge. The High Court held that the retrospective levy lacked contractual and statutory basis.

The charge related to spectrum held by telecom operators beyond 6.2 MHz from July 1, 2008 to December 31, 2012, with the levy to be calculated using prices determined in the 2012 spectrum auction.

The Centre has challenged the High Court judgment before the Supreme Court, seeking to revive the DoT’s demand against the telecom operators.

The dispute dates back to the National Telecom Policy, 1999, under which telecom operators moved from a fixed licence fee regime to a revenue-sharing model. Between 2001 and 2007, the DoT and Telecom Regulatory Authority of India (TRAI) issued various communications providing for recurring spectrum usage charges.

In May 2010, TRAI for the first time recommended a one-time charge on spectrum held beyond 6.2 MHz.

The Union Cabinet approved the levy on November 8, 2012, covering existing operators holding spectrum beyond 4.4 MHz. It also decided that spectrum held beyond 6.2 MHz would attract the one-time charge retrospectively from July 2008.

The DoT subsequently issued its December 28, 2012 order and demand notices, prompting Bharti Airtel and Vodafone Idea to approach the Bombay High Court in January 2013.

The High Court eventually allowed the telecom companies’ petitions and quashed the DoT’s decision and demand notices, holding that the levy did not have a contractual or statutory basis.