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Airtel, Vodafone get respite from Bombay HC

The tele-operators get respite after the Bombay HC extends the stay on notices for payment of non-agricultural taxes.
By HT Correspondent | PTI, Mumbai
UPDATED ON JUN 17, 2008 10:54 PM IST

Tele-operators Bharti Airtel and Vodafone Essar got respite after the Bombay High Court on Tuesday extended the stay on notices for payment of non-agricultural taxes.

The court had first stayed the notices issued by the Tahsildar of Thane in March and that stay was extended for six weeks.

The stay has been extended to enable the Collector of Thane to conduct fresh hearing on the matter giving opportunity to telecom companies to represent their case.

The counsel for Vodafone, Punit Anand said it was mandatory on part of the Collector to give a hearing before passing an order on payment of taxes. The order, in turn, will be reviewed by the high court.

Division bench of Justices Bilal Nazki and S S Shinde was hearing petitions filed by the two companies challenging the notices issued in March by the Thane Tahsildar to pay Rs one lakh per Cellular Base Stations (network towers) erected on roof-tops of residential buildings, for not paying non-agricultural tax since 2005.

The operators have about 90 such network towers each in Thane region.

The Tahsildar, in an affidavit filed before the court in April, stated that according to the Maharashtra Land Revenue Code (MLRC), non-agricultural tax had to be paid for commercial use of terrace (which is given for residential purpose) for erecting the network towers.

Vodafone and Airtel are liable to pay tax as the towers are on land that is not exempted for taking such tax.

Also, there is necessity to apply to the Collector for permission to convert use of land from one purpose to another (residential purpose to commercial purpose here), which was never taken, the affidavit states.

But Anand said that they had furnished copies of permissions for their towers to the court earlier.

Furthermore, in an affidavit filed by Airtel yesterday in reply to the Tahsildar, the tele-operator has stated that the MLRC did not cover its equipment and antennas.

Anand told PTI that they had first been issued notices in February 2005 and Vodafone had sought justification for the payment of the said taxes. But the Tahsildar had failed to reply.

Now, after 25 months, they sent notices again in March this year, seeking payment without giving break up of assessment and penalty, he said.

On March 28, the court had allowed interim relief to Airtel and Vodafone by staying the notices and restrained Thane tahsildar from demolishing the network towers.

The tele-operators had then told the court that they were ready to pay the non-agricultural taxes and penalty, provided they were given proper notice and opportunity of hearing, to determine such liability.

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