INDUS TOWERS LIMITED Vs. UOI

JUDGEMENT

(1.) This is a writ petition filed by M/s Indus Towers Ltd., (hereinafter referred to either as "Indus" or as "the petitioner") seeking the issuance of a writ of certiorari quashing the order of the Commissioner, Department of Trade and Taxes, Government of NCT of Delhi passed on 29.04.2011 on the ground that it is ultravires Articles 14, 19(1)(g) and 265 and entry 97 of List I (Union List) of the 7th Schedule to the Constitution of India. A prayer has also been made seeking directions to the Union of India, Ministry of Finance, New Delhi, which is the first respondent herein, to refund the taxes paid by the petitioner under the Finance Act, 1994 on the activity of the provision of "passive infrastructure services" or in the alternative to direct the said respondent to deposit the taxes paid under the Finance Act, 1994 for appropriation towards the tax liability arising out of the impugned order.

(2.) The petition arises in the following circumstances. Indus, which is the petitioner herein, is a company incorporated under the Companies Act, 1956. Its business is to provide access to the telecom operators, on shared basis to the telecom towers installed by it as well as the shelter, diesel generator sets, air conditioners, electrical goods, DC power systems, battery etc. Indus is a company registered with the Department of Telecommunication for providing passive infrastructure services and related operations and maintenance services to various telecommunications operators in India on a shared basis. It is the policy of the Government of India to encourage extensive infrastructure sharing and in pursuance with the policy, the telecom operators were required to create a high quality, rapid and wide coverage of mobile telecommunications network in India. The passive infrastructure facilities or services could be shared by several telecom operators so that it becomes costeffective. Indus provides such passive infrastructure services to the extent permitted by the applicable laws in India and was willing to offer them and share the equipment with several telecom operators to the extent permitted by the laws of India. Accordingly, it put up passive infrastructure facilities at several places. The arrangement works this way. Indus would put up the towers and a shelter which is a construction in which the telecom operators are permitted to keep and maintain their base terminal stations (BTS), associated antenna, back-haul connectivity to the network of the sharing telecom operator and associated civil and electrical works required to provide telecom services. The telecom tower and shelter, both put up by the petitioner, is called "the passive infrastructure". In addition to the tower and shelter, Indus also provides diesel generator sets, air conditioners, electrical and civil works, DC power system, battery bank etc. All these are known as passive infrastructure. The "active infrastructure" consists of the BTS, associated antenna, back-haul connectivity and other requisite equipment and associated civil and electrical works required to provide the telecommunication services by the telecom operator at a telecommunication site other than the passive infrastructure. Whereas the active infrastructure is owned and operated by the sharing telecom operator, passive infrastructure is owned by Indus, the petitioner herein. There could be several operators who may use the tower and shelter which are parts of the passive infrastructure by keeping their BTS etc. therein and sharing the entire passive infrastructure on an agreed basis. The antennae belonging to the sharing telecom provider may be put up or installed at different heights in the tower as per the requirements of the sharing telecom operators.

(3.) The working of the telecom network basically involves the process of receiving and transmitting the telecom signals. The active infrastructure which is owned and put up by the sharing telecom operators needs certain conditions for proper functioning and uninterrupted telecom network/signals. These conditions are maintenance of a particular temperature, humidity level, safety etc. These conditions are ensured by the passive infrastructure made available by the petitioner to the sharing telecom operators. We may examine this in some detail at a later stage.