() .-, (J 2 \ 2 C Q (1 - 0 D 2 (I) rj) d Q -3 t.) 0 c . H (I) 2 C C 0 0 fra BANGALORE•560O29 (RE2PRESTNEL) BY STU K M ASHWIN KUMAR DGM4LINANCE) APPELLANT (By SRI N VEiATARAMAN. SENIOR ADV FOR SRFiLIEIS\ IAKSHMI KLMARV\ ‘. SRIL)IL\RA\ •SH1VADASS. .I-LA.RISI1 R & SYED PEERAN. ADVS) AND I. ThE DEPUIY COMMISSIONER OF COMMERCIAL TAXES ENFORCEMENT I 501 FH ZONE KORAMANGALA BANGALORE560 047. 5. THE COMMISSIONER COMMERCIAL TAXES IN KARNATAKA, ‘ Y\I J’i \ IHLRIGE KXR\ NLX’1 GANI)H1NAC 1 AR BANGALORE560 009. 2... ST/FlE OF KARNATAKA THROUGH ITS PRINCIPAL SECRETARY, FINANCE DEPARTMENT, \‘]DHANA SOUDFLA BANGALOREL 560 001. [[/FfliJ ‘F INDIA 1 1RU Ii I’S Th\A\( i SEC RE 5TLIM (V IAC DL EM F NEW DELHF 110 001. 5. THE ASSISTANT COMMISSIONER OF SERVICE TAX DIVISION III. HS3IDC VANIJYA NIKUNJ UDYOG VIHAR, PHASE V, GURGAONI22 OC.2. (By SRI NR BHASKAR SCGC FOR R45, SRI ASHCK HARANAHALLI, SENIOR ADV. & SPECIAL COUNSEL FOR SRI K M SHIVAYOGI SWAMY HCGP FOR RU3) THESE WRIT APPEALS ARE FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER PASSE•D IN ThE WR1.T PElT] ION 150/il & i2693 727/il DATED 11/4/11. 33733396 2011 M/S ATC TELECOM TOWER CORPORATION PVT LTD (FOMERLY M/S ESSAR TELECOM INFRASTRUCTURE PRIVATE LIMITED) NOTE2, 3RD CROSS, 4TH BLOCK, HBR LAYOUT. BANGALOR156OO43 (REP, BY ANIL SOOD, REGIONAL HEAD, SOUTh REGION) (By SRI N VENKATA RAMANA, SR. COUNSEL FOR SRI B G CHIDANANDA URS, ADV,) 1. UNION OF INDIA REPRESENTED BY ITS SECRETARY MINISTRY OF FINANCE DEPARTMENT OF REVENUE •GO T EREMIAJT OF INDIA, NORTH BLOCK NEW DELHLI 10 001. 4 2. THE STATE OF KARNATAKA REF.. BY ITS FINANCE SE•CRETARY 3. V1DE-TANA SOUDIIA BANGALORE-560 00 1. 4. DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT-52) DVO-5. BANGALORE. . RESPONDENTS (By SRI N.R BHASKAR. SCOC FOR Ri. SRI ASHOK HARANAHALL1, SPL. ADV. & SRI KM SHIVAYOGI SWAMY HCGP FOR R2 & R3) THESE WRIT APPEALS ARE FILED U/S 4 OF THE K RN TK HIC H C OF RI AC2 PRAYING P0 Sf71 SIi) F TIIL ORDER PASSED IN THE WRIT PETITION NO,24592482/20 11 DATED 07/04/2011. X\ANo,348/L2u1IWANoS. 349o350c’QjI M/s. WIRELESS TI’ INFO SERVICES LTD IPkE’’L\TL,i K2O\\ N —S \ 1DM ‘ERORi S ETIT 5TH FLOOR.SJR PRIMUS, I T’/T ‘ ‘“)1 Ir.rrrm U . Ot jJ Sl1’U iA 7 ‘ BLOCK KOROM NGAI BANGALORE 560095, REPRESENTED BY ITS L’ H3E -FG— SHRI GAUTI-TAM V S. (Py SRIYIJTHS V LAX2SHM1 KLIMARAN, \i SRIDHARAN SHIVAI)ASS i-’&RISH R SYED PEERAN. ADVEI STATE OF KARNATAKA I HROUGH I PS PRIN( IPAL SECRETARY FINANCE DEPARTMENT VIDHANA SOUDHA BANGALORE 560 001. 2. THE COMMISSIONER OF COMMERCIAL TAXES IN KARNATAKA ‘VANIJYA THERIGE KARYALAYA” GANDHINAGAR. BANGALORE 560 009. 3. THE ASSISTANT COMMISSIONER OF COMMERCLNL TAXES (AUDITJ-4 1, DVO-4, 4TH FLOOR, ROOM No,403 , VTK2, NEAR NATIONAL \ ILl AGE G\MES COMPLEX RAJET)R? NAGAR, KOROMANGALA BANGALORE 560 047. 4. CNION OF INDIA THROUGH ITS FINANCE SECRETARY MTNTSTP OF FP\j\(E DEPJ PME\ P O’ RF T \LJZ NEW DELHI 110 001. 5. THE COMMISSIONER OF SERVICES. TAX t) A \J’’ T “ 5Th FLOOR,S P COMPLEX, NC. 16. LAL BAGEl ROAD. BANGALORE 560 027. (By SRI ASHOK HARANAHALLI. SPL. ADV.. AND SRI K NI SHTVAYOGI SWAMY, H COP FOR R 1 -3. 326 3 717 171 . f65 0 THESE WRIT APPEALS ARE FiLED li/S 4 OF THE KARNATAKA HIGH COURT ACT PRA ING TO SET ASIDE THE ORDER P\S5fD P’ HIP WEll Pt LITTON ‘v 2276 7 ‘201’ DATED 11/04/2011 WL348820i1 T ANos350235i221l BETWEEN M/S WIRELESS TI’ INFO SERVICES LTD IPRESF i\TL\ KNOWN \S \ IOM NEThORK LiD) 5TH FLOORSJR PRIMUS, NO 1 KORAMANGALA INDUSTRIAL LAYOUT 7TH BLOCK, KORAMANGALA. BYNGALORE 560095, REPRESENTED BY ITS ASSISTANT MANAGERAEGAL SHRI GAUTHAM M S ASSISTANT MANAGERLEGAL. (By SEJYLiTHS V LAKSHMI KUMARAN, V SRIDHARAN, SHIV.ADASS, I 1ARISH R & SYED PEERAN. ADV5I STATE OF KARNATAKA THRULGT- R\CTF ‘4 sL(PETR\ FINANCE DEPARTMENT VIDHANA SOUDHA BANGALORE 560 001 2. THE CGMfvIISSiONER COMMERCIAL TAXES IN KARNATAKA ‘N A 9 F- T FRIGE liIcli ‘.Z-U GANDHINAGARA BANGALO1/E 560 009. COMMERC [AL TAXES (A1DIFJ41 D\O4 4IHILC)OR ROOM NO 403 VTID2 NEAR NATIONAl \ iLLACE C ‘AlES COMPI LX RAJ ENDRA NAGAR, IDRAMANGALA BANGALORE 560 047. 4. UNION OF INDIA THROUGH ITS FINANCE SECRETARY MINISTRY OF FINANCE DEPARTMENT OF REVEN FE NEW DELHI 110 001. 5. THE COMMISSIONER OF SERVICE TAX BANGALORE, 5TH FLOOR,S P COMPLEX, NO 16, LAL BACH-I ROAD. BANGALORE 560 027 RESPONDENTS (By SRI ASHOK HARANAHALLI, SR. ADV, AND SPL. ADV. FOR SRI KM SHIVAYOGJ SWAMY, HCGP FOR Ri-3 SRI NR BHASKAR. SCGC FOR R4-5) TRESTI WRIT APPEALS ARE FILED U/S 4 OF 41 IF R\P\fM 1-itOH’ GLEA -C T Sri -TDE j ORDER PASSES) IN THE WRIT PETITION 22864422875/.10 DATED 1. 1/4/11 WANos./H612JJi M /S ATC TELEC.OM TOWER CORPORATION PRIVATE .LTD (FORMERLY M/S ESSIVR SEE LECU)v] iYRNEFRUOTIS RE PVT LTD) N0 432. 3 CROSS 4TH BLOCK HER LAYOLS B.ANCALORE - 560 043 (REP. BY MR. ANIL SOOD. REGIONAL HEAD. SOUTH REGION) ..APPELLANT (By SRI N VENKATA RAMAN, SENIOR COUNSEL FOR SRI B 0 CHIDANANDA URS., ADV.) AND I. UNION OF INDIA REP. BY ITS SECRETARY, MINISTRY OP FINANCE. DEPARTMENT OF REVENUE. GOVERNEMENT OF INDIA, NORTh BLOCK, NEW DELHI - 110 001. 2. THE STATE OF KARNATK, REF. BY ITS FINANCE SECRETARY, VIDHANA SOUDHA, BANGALORE 560 001 DEPUTY COMMISSION ER OP COMMERC L\L TAXES (AUDIL52), DVO5, BANCD LORE ..RESPONDENTS (By SRI N R BHASKAR. SCGC FOR RI, SRI ASHOK HARiNAi1ALLI SPECIAL COUNSEL & SRI KM SHIVYOGISWAMY, HCGP FOR 172 & 3) THESE Vk/fJ APPEALS ARE FILED 14/5 4 OF T’H]4 KARNATAFIA HIGH COURT A( PRAYING TO 5E2. ASIDE THE. ORDER PASSED IN TEE XRIT PETITON NO 11361 11372/2.011 DATED 1/04/201 1 BET’A’EEN TIlE STATE OF KARNATAKA B\ Ff5 FP’A\CE SLCt<EI VIDHANA SOUDHA, BANGALORE - 560 001. 2. DEPUTY COMMISSIONER OF COMMERCIAL TAXES. AUDIT52, DVO5, BANGALOPE. ...APPELLANTS (BY SRI ASHOK HARANAHALLI, SPECIAL COUNSEL & SRI K.M SHEVAYOGJSWAMY. HCGP) MiS ESSAR TELECOM INFRASTRUCTURE PVT. LTD., t 1.04, 1ST MAIN ROAI). EAST OF NGEF LAYOUT, KASTURINAGAR BANGALORE — 560 016. BY NAGARAJU NARA FINANCE N. ACCOUNTS EXECUTIVE. 2.. UNION OF EDIA BY ITS SEC..RETARY. MTNTSTR )J- ‘\ ‘‘ ( 17 DEPARTMENT OF REVENUE, OR\MENT r i NEW DELFII 110 001 (BY SRI N VENKATA RAM. SEN [OR ANY. & SRI .21.0. CHIDANAND URS. ADV.) TEl ES 11€:. WRE f2J u / S KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER DATED 07 1U i WP. NOs 2459-2 / 20 10 RES). PASSED BY fl-fE LEARNEI) SINGLE .JLDGE IN SO F R AS IT PERtMNS TO QUASHING OF TIlE LEVY OF PENAl TV ANI) INTEREST AM) ALSo N HESI’E(’T OF DIRECTION TO ‘filE STATE GOVLRNMEN I’ FOR RECOVERY OF 111K lAX AMOL’NI FROM TIlE SECOND RESPONDENT UNION OF INDIA VA No.4455/2011 & WAN0s 5813 5871/2011 BFTWFEN I DEPUTY COMMISSIONER OF COMMERCIAL TAXES ENFORCEMENT- 1. souni /ONE. KORAMANGALA BANGALORE. THE COMMISSIONER OF OMMERC IAI LAXFS IN KARN4 IKA XMJ’ IHFRT6I’ K4RS 4 G4NI)I 1I’TAGAI BANGAU)RF-9. - II ST EC KU 41 4 ‘ s I R FT. V%( I DEl R I dfl NT VIDIIANA SOt PTIA BAMt ORI’ 360 01)1 V C O (‘OMMERC AL IAXE’ •A: iii’, Il ‘%i1ak!’’N.’rI(’ l ‘.‘.a1L’,’iII’JsI- t S -I I’jV’ 11 RAJENDRA G\R KORAMANGALA I3AN GAL ORE 560 047 \PPF LL V’J PS BY SRI \S1 10K 1 1AR\AH \LL I SPL( IAI ( 01 ‘S1 I Sz SRi K M T1JVAYOG1SWkMY H( CP) M/S INDUS I0V ERS I ID # 12, POWERD 7’’FLOOR SUBRAMANYA ARCADE BANNERGI IA’FIA ROAD BANGAL ORE 560 029 BY SRI K M SWINI KUMAR DGM FINAN( K L NION OF INI)IA ThROUGh IFS 1 INAN( I SI (RE I kR MINIS1RY 01 1 INANC 1 DEPAR I MEN I 01 RF I N I 1 OVLRNMI NI OF INI) FVDLIHI 10001 12 COMMISSIONFR OF SERVICE lAX BANCALORE. TI1 FLOOR SI) ( )MPLEX. 16. LALBAGH ROAD BAN. ;ALORE 27 . RESP( )\F)E\ ES I3v SRIYUTiIS \ LAKSFIMI KI iARAN, V SRIDILARAN, SIJIVADASS. HARISII. SRI SYEI) PEERAN.AL)V,. FOR Ri SRI N.R EHASKAR, CCC FOR R2 & R3) PHESF WRI I APPEALS ARE FILLD 1. /5 4 OF PHE KARNAPAKA HIGH C OUR I’ ACT PRAYING IX) SET ASIDE THF ORDER DATEI) 07/04/2011 IN WRH PETITION NOs 11508/2011 ANI) 12693 12727/2011 C/W 22876 )887/2010 ANI) 22861 22875/2010 (P RES) PASSED BY PHF I EARNED SINGI F JUDGE IN SO FAR AS IT PERTAINS P0 QUASHING OF I HF LEVY OF PENALlY VND INTEREST AND ALSO IN PESPEC 1 OF DiRECTION TO THE S]AIF GOVERNMENT FOR RECOVERY OF THE TAX AMOI NT FROM IHE SECOND RESLONDENJ UNION OF INDIA 13 INF RAS FRI TC 111RE PV’I I ID NO. 104, 1ST MAIN ROAD, FAS1 OF NOFF IAYOt 1 KAST[ T RINAGAR. BANGALORE 16 REP, BY NAGARMU NARA, F]NANCE & AC( OUNTS EXECUTIVE. STA Tb OF KARNATAKA REP. BY ITS FINANCE SECRETARY VIDHANA SOUDI LA BANGAI ORE 560 001 3 DEPUTY COMMISSIONFR OF COMMERCIAL FAXES (ATIDIF 92) DVO BANGALORE RESPONDENTS (By SRI B C CHIDANANDA URS ADV FOR Ri SRI K M SIIIVAYOGI SWAMY HCGP FOR R2 & 3) IHFSF WRIT APPEALS \RE FILED U/S 4 01 IIIF KARNATAKA HIGH COUR’I A( I PRAYING 10 SET ASIDF IRE ORDER PASSI I IN FBI WRIT I FJIIION \ 2 19 82 DVIFD 4 14 M/S ATC TELECOM TOWER CoRPORATION PRIVATE LIMITED (FORMERLY M /5, ESSAR TELECOM INFRASTRUCTURE PRIVATE LIMiTED) NO, 432, 3RD CROSS, 4TH BLOCK, HBR LAYOUT. BANGALORE 560 001. REP BY MR ANIL SOOD. REG IONAL HEAD. SOUTH REGION. 2. STATE OF KARNATAKA REPRESENTED BY ITS FINANCE SECRETARY. VIDHANA SOUDHA BANGALORE 560 001. DEPUTY COMMMISSIONER OF COMMERCIAL TAXES(AUL)1T 52) DVO BANGALORE RESPONDENTS (By SRI B C CHIDANANDA URS. ADV. FOR RI, SRI K M SHIVAYOGI SWAMY, HCGP FOR R2. & 3) THESE WRIT APPEALS ARE FILED U/S 4• OF THE KARNAIAK’\ HIGH COURT AO PRAYING TO SFT \SIDE THF C)RDER 1- ‘SSEG “ ‘-iF” ‘[i ‘-E ‘T’ L Ii TDA_TTG] I /4/11 UNION OF INDIA IRO 4 44’ ‘ ‘C ‘\rrY’ ‘—‘1— T)T’’X ‘‘ — i L 15 .NEWDELH.I i10 001. 2. THE COMMISSIONER OF SERVICE TAX BANGALORE, 5TH FLOOR. S P COMPLEX, No.16, LALBAGH ROAD, BANGALORE 560 027 , ,APPELLANTS (By SRI N R BH•.ASKAR., SCGC) AND M/S. WIRELESS YF INFO SERVICES LTD, (PRESENTLY KNOWN AS VIOM NETWORKS LTD) 5TH FLOOR, SIR PRIMUS, No, 1, KOROMANGALA INDUSTRIAL LAYOUT, 7TH BLOCK, KOROMANGALA, BANGALORE 560095 REP. BY ITS ASST. MANAGER LEGAL SHRL GAUTHAM M S. 2. STATE OF KARNATAKA THROUGH ITS PRINCIPAL SECRETARY FINANCE DEPARTMENT V]DHANA SOUDHA BANGALORE - 560 001. 3. THE COMMISSIONER, COMMERCIAL TAXES IN KARNiV1AKA, AZANIJYA THERIGE KATYALAYK GANDHINAGARA BANGALORE -560009. 4 THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDITL4i 16 DVO4. 4 •• FLOOR ROOM No 403 V12 NEAR NATIONAL VILLAGE GAMES COMPLEX, RAJENDRA NAGAR KORAMAN GALA BANGALORE 560 047 RESPONDENTS (SRIYUTHS V. LAKSHMIKUMARAN, SREEDHARAN, SIII\AD\SS H\RISHR AD\s FORRI SRI KM. SHIVAYOGIS\VAMY. HCGP.. FOR R2 TO R4) ThESE WRIT APPEALS ARE FILED U/S 4 OF THE KARNATAKA I uGH COURT ACT PRAYING P0 SET ASIDE THE ORDER PASSED IN THE WRIT PETITION 2286475,’10 DATED 11/4/11, ANos,I5259i5292 2011 BETWEEN UNION OF INDIA T9 fmrr r’ ii TmC’ r’TT . ‘Tf’ r’ c””r F’ Fji\kJ ‘JFI ii ri L’ I L,LiE’C, -\iY MINISTRY OF FINANCE DEPARTMENT OF REVENUE, NEW DELHI- 110 001. 2. THE ASSISTANT COMMISSIONER OF SERVICE TAX DIVISION III, HSIDE VANIJYA NIB UNJ UDYOG 10 NR PHASE \ GUR.GAON 122 002. A.PPEL.LANTS Lv SRI N B I3HASKAR 3(2CC) M/S INDUS TOWERS LTD NO 12, TOWER-D. 7TH FLOOR. SUBRAMANYA ARCADE BANNERGHL [TA ROAD BANGALORE-560 029 17 (REPIESENTED BY SRI K M ASHWIN KUMAR DGM FINANCE) 2. THE DEPUTY COMMISSIONER OF COMMERICAL TAXES ENI ORCEMENT I , SOUTH ZONE, KORAMANGALA BANGALORE 560 047. 3. THE COMMISSIONER COMMERCIAL TAXES IN KARNATAKA VANIJYA ThERIGE KARYALAYA” GANDHINAGAR, BANGALORE - 560 009. 4. STATE OF KARNATAKA THROUGH ITS PRINCIPAL SECRETARY, FINANCE DEPARTMENT, VIDHANA SOUDHA, BANGALORK 560 001 (By SRIYUTHS V LAKSHMI KUMARAN. V SPIDHARAN, ADVS, FOR Ri SRI KM SHIVYOGI SWAMY. HCGP FCR R2 TO 4) ThESE WRIT APFEALS ARE FILED /5 4 OF THE HIGH COURT ACT PRA . YING TO SET ASIDE THE ORDER PASS.ED IN THE WRIT PETITION 1150.8/11 & i2693 727,’l.IDATED 11/4/11. 57O I. THE STATE OF KARNATAKA B ITS FINANCE SECREIARY VIDHANA SOUDHA, 18 DEPUTY COMMISSIONER OF COMMURCI ‘1L fAXES AUDIT52, DVO-5. BANGALORE .APPELLANTS (By SRI ASHOK HARANAHALLI, SPECIAL COUNSEL & SRI K. M SHIVAVOGI SWAMY. HCGP FOR STATE) AND M/S ATC TELECOM TOWER CORPORATION PVT LTD.. (FORMERLY M/S EASSAR TELECOM INFRASTRUCTURE PVT. LTD.) #432, 3RD CROSS. 4 BLOCK, HBR LAYOUT, BANGALORE 560 043. BY MR. ANIL SOOD, REGIONAL HEAD. SOUTH REGION. 2, UNION C)F INDIA BY ITS SECRETARY, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI - 110 001 RESPONDENTS By SRI N. \. AL-k RAM, SENIOR CDV SRI B.C. CHIDANANDA URS. DV. FOR RI S.RI NR BHASK 1YR, j\fl\J,, FOR FL) THESE WRIT APPEALS ARE FILED U/S 4 OF ThE 1L-P\AF-KA TCC COLR P\C PG RAT 5iT)R HT GRUFF- FO i U I - NDS n 3’2A UL CAFSr_) ‘0 tC. F-C \IL-i SN( F JT C -A C TERN 1 R5 LC Q\SHIC OP LiE AG OP Fi AND INTEREST AND ALSO IN RESPECT OF DIRECTION TO 19 THE. STATE GoVERNMENT FOR RECOVERY OF THE TAX AMOUNT FROM. THE. SECO1ND RESPONDENT UNION OF INDIA. THESE APPEALS COMING ON FOR HEARING - I\TERLOCUTOR\ \PPLIO JIO’\ THIS D N KUMAR J DELIVEREI) THE FOLLOWING: JUDGMENT All these writ appeals are preferred against the common ordtr passed by the learned single Judge. None of the parties are happy with the order, Therefore, everyone has preferred appeal aainsl the said order to the exwnt they are atiLrieved of such order. Therethrc, these appeals are taken up for consideration, together and disposed of by this common order. For the purpose of convenience, the part...ies are referred •to as they are arrayed to in writ appeal No,34O33439/2Ol I arising c.jut of W,P. NbA 1508/2011 and i2693i2727 of 2011, FACTUAL MATRIX 2. The arsessee — V/s. Indus Towers Limi.teci is a Company incorp.orated under the Compani.es Act. 1956, having its registered office in New Delhi. and engaged in providinf. h r 20 Passive Infrastructure and related operations and maintenance services to various telecommunication operators in India on a shared basis. The assessee is registered with the Department of Telecommunications (DoT) for providing Passive Infrastructure Services to mobile phone operators. The nature of services provided by the assessee was envisaged by Government of India initiative “MOST” (Mobile Operators Shared Towers). The DoT in a bid to create a high quality. low- cost, rapid. wide coverage mobile telecommunication network in India sought to propose. through the project “MOST”, a system of sharing of passive infrastructure by the various telecom service providers. 3. The main object of sharing the infrastructure Is for ensuring economy by avoiding multiple Telecom sites for different Mobile Service Providers in the same area. This concept was mooted and promoted by the Ministry of Telecommunications, Government of India, under the project nick-named as M05’r, with an objective of reducing the number of towers and thus. optimizing the capital and 21 operational epciidIitue of tile Mobile Scivice Prt n Idcr%. I ndei thl’ project the sonrepi of pn’&sibili;v of multi technology IGSM and (‘DMA) and multi operatois (up to six )perators) shanng a single tower with a view to bnng down cost and enhance spread 01 affordable %erVIees continued to be carried out successfully by the Industry. 4 The assessee has been registered iidth DoT for providing suc h sinred Passive Infrastructure Services to various telecommunication operators in India. For the said purpose the assessee owns ui acquires md iiocsses or will ctu c o ss c. tam ck.c.ommu i thor site .fras r t i-v ard wiupm i I .n n tin s licenser welts India. F r pin’ iding the said -en 1’ e’. tht a”-e’sef- 1ia entered Into ickarlc al Ma%ter Sefl ire. Agrterritni’ with tile’ in pete cli i ci 1 k S I-a odd ia Ni ni Tan 1i— eii 1 a;i1 .1 ..h qni “p ci psi) i’Ic ‘ — .i’ itatit ii •k’ ii: I&’j %rt ft C ‘2L’ th’ A’’ ‘ .4 iii .bi 1 i .‘ 1’ tii’° clii ‘ —‘ r . 1- s. ni it. cc 1. 22 possssed 1w thc assessee and for the ielatcd operation and m iintenn eii s offer d by the issessec loi the fleetive and eflicieni tie of the passix c infrastructure these charg s are in the naltire of serviu- ehartes and are nor in the nature of coii’4deratioii received for iransler of properly or for tran’ftr of right to use any goods. The passive infrasi ructure is nol just tower as erroneously understood in the notice hut also other equipments such as DG sets, air conditioners, power managrncni svsftnis batteiies and otliei electrical works The assessee provides recjuired ser\ ices along with the sharin of passive inlrastructure i.e.. tower ‘ates and shelter rOOlflS foi installation and salt keeping ol equipments (like antenna I 1 Ba 1 e ‘ “it tni BT9 n t 0 0 C at ii tlr i its itC i air cour ICI po\ g Id 0011 B B 0! 11ZJflu(’1J1ta Lti0S TTrl. 1t’iTT1 Ii ‘‘I InC eu uc ‘Ii;C rvr! 0 Its \( en er to 4c BC rri ci i q al mi i i 0 1 23 inside the shelter room for smooth running of BTS. The assessee is also responsb1e for saictv of ihe operator eciuiprnents at fts site. For all these services (site access. power supply, power conversion, air conditioning and safe keeping), the assessee receives a consolidated service revenue froni its customers. 5. The right, title, possession and control in the passive infrastructure located at the.: telecommunication site including and not limited to the tower, shelter, diesel penerator sets. batteries, air conditioners and e’ect neal arid civil works including any enhancement carried out by the assessee vest solely with the assessee. f]w sharing ope’rator Le.. We ide-coin service priyuiders on execul ion of a service corn rnt.t, nas the right to install equipments such as BTh e.qulpment, a.ssoeiat.c:ci antennae and active infra network equipm.ents and other ‘ctusitr cci ulpments rectuireci to provide t.eiecommunicat.ion serLce.s them. .0 the.ir customers:, right, title and 24 Interest In all such equipments Installed on the site by the Sharing Operators would remain with such operator& only. 7. Prior to placing the service order, the Sharing Operator should provide Its requirements and technical specifications to the assessee for passive Infrastructure. The assessee will, within the time frame as prescribed In the agreement. respond to such service requests with Its comments, suggestions and Its plans for meeting the requirements of the operators. The requirements may be met either through the existing sites of the assessee or by the creation of new sites. The Sharing Operator will subsequently deliver a Site Request Indicating Its site options In order of priority. The assessee upon receiving such Site Request sends the Site Proposal Indicating an outline of Its Implementation plan along with service fees. Only upon receiving the Site Proposal, will the Sharing Operator Issue a Service Order within the time frame as prescribed In the agreement, setting out the details of site required along with technical requirements for the Installation and setting up of the Sharing 25 Operatods eqtupments. The assessee would confirm the order and further, in accordance with the •terms of the agreement, issue a “Read For Active Installation” (RFAI) Notice eonlirmtng the Site Acces Atailahilitx to the Sharing Operator. Prior to coniirnnng the site access availability, the assessee should ensure arnong other things that the Sharing Operator is able to move his. equipments into the site for installation and that the site is capable of accommodating Sharing Operator s ec uipmeuts in accordance with the standard configuration set out in the agree.ment. It is thereafter, that the asse.ssee and the Sharing Operator will execute a Sen’iee Contract, which will include the terms as speeiiled in the agreement. The said contract provides for Site Access Availability and Operation and Maintenance Services of the Site: in reiation to wheh the e.ontmaet is exe.euted. Site Ae..eess Availability mean.s that the Sharing Operators are granted access on nonexeinsive basis t.o tile itss’e nrrastruei Ire cavued. eontrei led and operated by the asses•see and loe/ated (at th e sit.e, Authorized emplovees/ sniarontraet.ors of the Sharing Operator snail h.a,ve access to Ijie Sfiarinj ().Pt iter s itguipni€: ills. assesses aid 26 also pIo idc for the Opetaflon and Maintenance SerncC m i-datjn to each .Iw. UI the kifrastnicture 1 vd equipnlents inc luding passive inirastiucture located at thc site is controlled managed and owned by the assessee However, the Sharing Operator he respoiMble br the operatIon and maintenance of then equipments. for which purpose. access will be pro’ ided to the authorized employees / sub-contractors of the Sharing Operator The assessee retains the iigbt to provide access to the ‘4w including any inlrastructure to other tekcoin senice pnnldcrs. for any purpose at. its discretion. the Sharing Operators also retain the fight 1. seek passne inira’tnictui e servir c’s from oihei Pasi e infrasinwl un’ e i tnid ii .-cee re 1 ,r_c4jeI hI3 ncre,’-pfl ‘‘earance’ / pcrmisic.n” approriN t’rcnn k ru / it (‘lilt lint, painitsFcurrkir tti t)i t4r -ft ‘St’ sit i ig c’taa N. ‘n”L tthit’.% $‘flls,, fSib% I c ft r’ h1j ij ‘let’-’ )fl1rfC Pa c1” ‘.r’l.r• il.— Ta ‘r n r ie a t C at ii I ‘itt . 1 S1 fl% t c Jairilt :n i;. !,zn,lrt t er’ ‘a I I’• ‘;.._. . II I S 27 Access Availability. The assessee is also assessed under the Finance Act. 1994 and Is paying service tax. 8. The assessee was served with a notice under Section 39(1) of the Karnat.aka Value Added Tax, 2003. (hereinafter referred to as the KVAT Act). wherein It was proposed to re-assess the tax liability for the period from April 2008 to May 2010. The said notice proposed to demand VAT I amounting to Rs. 119.82 Crores leviable on the consideration received as “passive Infrastructure fee” from the telecom operators for the passive telecom Infrastructure services provided to them during the assessment period from Apr11 2008 to May 2010. The notice also sought to demand Interest and penalty. This notice sought to categorize the activity of leasing the telecoxnrfiunlcatlon towers to various mobile telephone operators, as a deemed sale within the meaning of Section 2(29)(d) of the KVAT Act. 2003. The assessee filed a reply contending that their activity does not Involve any sale or any transfer of right to use and therefore. the same cannot be subjected to VAT. They also ified additional statement of 28 objections pointing out thc enors in thc computation of turnovet for dii re1e ant periods Ovenuling their objection the first respondcnt passed the ic assessment ordet and issued demand notice dated 11 03 2001 under SectIon 39(1) oi the K’’AI Act confirnung the proposals made in the proposition notice. However, the respondents accepted the correction of calculation error Aggneved b the said ordei, the assessee preferred writ petition before this Court in w P No 11508/1011 and 12693 1t2!/2011 on the ground that the orders an bad in laui and c.ontian to thc. provisions of the K 41 Act 1w Sin file Ii titnr ni ibj 0, nir hcWn t ( di t. Ic.. s s i idi Ic c hr c c I C e 0 C OfliolOditIC S .et Oh t Ill paia 6 ul the ‘4ateiiient of oh 1 eutions. tht a esset Iio, constructed i.nd sernbled he qui nnts and has provided theni on lease io the different relecom con1panie br their use on renial basis as per the agreenient entered mb between ihe e-sesee an(l tile other telecom companies. Respondent has verified the a2reernenl entered into between thc pailies. On rerificatiori of the agreement the\ noned th it the cellulat operator shall maintain on all tin actire infrasn uclure equipmenl identification