The Bombay High Court has set aside spectrum charges amounting to nearly Rs 23.6 billion imposed on Bharti Airtel and Vodafone Idea Limited (Vi), ruling that the government could not retrospectively levy the charges for the period between 2008 and 2012.
A division bench of the court held that the Department of Telecommunications (DoT) had failed to identify any statutory or contractual provision that authorised the imposition of the charges years after the spectrum had already been allocated and paid for under the prevailing licence agreements.
The dispute originated in 2012 when the union cabinet decided that telecom operators holding spectrum beyond 6.2 MHz would be required to pay a one-time spectrum charge with retrospective effect from July 2008. Following the decision, the DoT issued demand notices to operators including Airtel, Vodafone India and Idea Cellular. Vodafone India and Idea Cellular later merged in 2018 to form Vi.
The one-time spectrum charge was introduced following the supreme court’s 2012 judgement on 2G spectrum allocation, with the government seeking an upfront fee for spectrum held by operators beyond the specified threshold. The matter has remained under litigation for nearly 15 years.
Ruling in favour of the telecom operators, the high court observed that under the National Telecom Policy, 1999, operators had already migrated to a revenue-sharing regime and were paying higher spectrum usage charges as additional spectrum was allotted.
The court noted that the government had itself allocated spectrum beyond 6.2 MHz after collecting additional revenue share and subsequently attempted to impose a separate one-time charge on the same allocations.
While the judgment does not specify the total value of the demands, Airtel’s latest annual report recorded a contingent liability of Rs 160 billion related to the matter, while Vi reported dues of Rs 75.81 billion.
