STU K M ASHWIN KUMAR v. I.5.2... ThE DEPUIY COMMISSIONER OF COMMERCIAL TAXES ENFORCEMENT

UNION OF INDIA REPRESENTED BY ITS SECRETARY MINISTRY OF FINANCE DEPARTMENT OF REVENUE •GOTEREMIAJT OF INDIA, NORTH BLOCK NEW DELHLI 10 001. 4

THE STATE OF KARNATAKA REF.. BY ITS FINANCE S E•CRETARY V1DE-TANA SOUDIIA BANGALORE-560 00 1. 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 H IC H C OF RI AC2 PRAYING P0 Sf71 S Ii) F TI IL 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, U . Ot I T’/T ‘ jJ Sl1’U ‘“)1 Ir.rrrm 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. THE COMMISSIONER OF COMMERCIAL TAXES IN KARNATAKA ‘VANIJYA THERIGE KARYALAYA” GANDHINAGAR. BANGALORE 560 009. 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. CNION OF INDIA THROUGH ITS FINANCE SECRETARY MTNTSTP OF FP\j\(E DEPJ PME\ P O’ RF T \LJZ NEW DELHI 110 001. 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 WL348820i1TANos350235i221l 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 MANAG ERLEGAL. (By SEJYLiTHS V LAKSHMI KUMARAN, V SRIDHARAN, SHIV.ADASS, I 1ARISH R & SYED PEERAN. ADV5I STATE OF KARNATAKA THRULGT- FINANCE DEPARTMENT VIDHANA SOUDHA BANGALORE 560 001 R\CTF ‘4 sL(PETR\

THE CGMfvIISSiONER COMMERCIAL TAXES IN KARNATAKA ‘N A9F-TFRIGE liIcli ‘.Z-U GANDHINAGARA BANGALO1/E 560 009.

5. 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. UNION OF INDIA THROUGH ITS FINANCE SECRETARY MINISTRY OF FINANCE DEPARTMENT OF REV EN FE NEW DELHI 110 001. THE COMMISSIONER OF SERVICE TAX BAN GALO RE, 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 ORDER PASSES) DATED 1. 1/4/11 IN THE WRIT PETITION 22864422875/.10 T Sri -TDE j WANos./H612JJi M /S ATC TELEC.OM TOWER CORPORATION PRIVATE .LTD (FORMERLY M/S ESSIVR SEE LECU)v] iYRNEFRU OTIS RE PVT LTD) N 0 432. 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 C OURT 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 KARN 4 IKA XMJ’ IHFRT6I’ K4RS 4 G4NI)I 1I’TAGAI BANGAU )RF-9. II ST EC KU 41 I ‘ s FT. V%( I DEl R I dfl NT VIDIIANA SOt PTIA BAMtORI’ 360 01)1 4 R V C O (‘OMMERC AL IAXE’ •A: iii’, Il S -I I’jV’ ‘%i1ak!’’N.’rI(’ l ‘.‘.a1L’,’iII’JsI-t 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 1OVLRNMI NI OF INI) FVDLIHI 10001 12 COMMISSIONFR OF SERVICE lAX BANCALORE. TI1 FLOOR SI) ( )MPLEX.

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) DATEI) 07/04/2011 PHESF WRI I APPEALS ARE FILLD 1. /5 4 OF PHE KARNAPAKA HIGH C OUR I’ ACT PRAYING IX) SET ASIDE THF PETITION IN WRH ORDER 12693 12727/2011 C/W 22876 NOs 11508/2011 ANI) )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 S]AIF ALSO IN GOVERNMENT FOR RECOVERY OF THE TAX AMOI NT FROM IHE SECOND RESLONDENJ UNION OF INDIA PESPEC 1 OF DiRECTION TO THE 13 INF RAS FRI TC 111 RE PV’I I ID NO. 104, 1ST MAIN ROAD, FAS1 OF NOFF IAYOt 1 KAST[TRINAGAR. 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) IIIF IHFSF WRIT APPEALS \RE FILED U/S 4 01 KARNATAKA HIGH COUR’I A( I PRAYING 10 SET ASIDF IRE ORDER PASSI I DVIFD IN FBI WRIT I FJIIION \ 2 19 82 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’ Ii TDA_TTG] I /4/11 L UNION OF INDIA IRO ‘ ‘C 4 44’ ‘\rrY’ ‘—‘1— T)T’’X ‘‘ i L — 15 .NEWDELH.I i10 001. 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) 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. STATE OF KARNATAKA THRO UGH ITS PRINCIPAL SECRETARY FINANCE DEPARTMENT V]DHANA SOUDHA BANGALORE - 560 001. THE COMMISSIONER, COMMERCIAL TAXES IN KARN iV1AKA, AZANIJYA THERIGE KATYALAYK GANDHINAGARA BANGALORE -560009.

2. AND

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’ -\iY L,LiE’C, Fji\kJ ‘JFI ii ri L’ I 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 BAN NERGHL [TA ROAD BANGALORE-560 029 17 (REPIESENTED BY SRI K M ASHWIN KUMAR DGM FINANCE)

4. THE DEPUTY COMMISSION ER OF COMMERICAL TAXES ENI ORCEMENT I KORAMAN GALA BANGALORE 560 047. , SOUTH ZONE, THE COMMISSIONER COMMERCIAL TAXES IN KARNATAKA VANIJYA ThERIGE KARYALAYA” GANDHINAGAR, BANGALORE - 560 009. 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. HC GP 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 2, 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. 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. SRI B.C. CHIDANANDA URS. DV. FOR RI S.RI NR BHASK1YR, j\fl\J,, FOR FL) AL-k RAM, SENIOR CDV 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 UL CAFSr_) ‘0 tC. F-C \IL-i SN( -A C TERN 1R5 LC Q\SHIC OP LiE AG OP Fi AND INTEREST AND ALSO IN RESPECT OF DIRECTION TO - NDS n 3’2A F JT C 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\ DELIVEREI) THE FOLLOWING: \PPLIO JIO’\ THIS D N KUMAR J 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.te ci 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) 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 epciidIi tue 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 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 .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 1i— cli i 1 k S Ni I-a Tan eii1a;i1 .1 ..h qni “p ci psi) i’Ic ‘ — .i’ itatit ii •k’ ii: I&’j %rt ft C ‘2L’ th’ A’’ ‘ .4 iii .bi1i .‘ 1’ tii’° clii ‘ —‘ r 1- . s. it. cc

1. 22 possssed 1w thc assessee and for the ielatcd operation and m iintenn eii s offer d by the issessec loi 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, conditioners, 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 i itC i air cour ICI po\ g Id 0011 B B 0! 11ZJflu(’1J1ta Lti0S TTrl. 1t’iTT1 Ii ‘‘I InC ‘Ii;C rvr! 0 Its \( en er 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 asses see. 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.

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 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 the details of 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.e uted. 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/ sniaro ntraet.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 Opet aflon and Maintenance Sernc C m i-dat jn to each .Iw. UI the kifrastnicture 1 vd equipnlents inc luding passive inirastiucture located at 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 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 infrasi nwl un’ e i .-cee re1,r_c4jeI hI3 ncre,’-pfl ‘‘earance’ / pcrmisic.n” approriN t’rcnn k ru / (‘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• Ta ‘r n r a t C ‘itt .1S1 fl%tc Jairilt :n i;. !,zn, lrt t er’ ‘a I I’• ‘;.._. . il.— I II I S 27 Access Availability. The assessee is also assessed under the Finance Act. 1994 and Is paying service tax.

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 en ors in thc computation of turnovet for dii re1e ant periods Oven uling 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.

1.. ‘II’ ‘ L .‘ 1 1 1 tS 39 have rightly registered themsehes as service providers under tht finance A 1 1994 nd they hive been paying the srce tax, Ther is no element of sale involved It is a pure case of extending service and therefore, the question of imposing VAT on the same aspect would not arise, The learned Single Judge has not properly appreciated this aspect and committed an error in holding that the nature of the activity amount deemed sale and the State Go ernmnt has fn recover the VA1 from the service providers paid by the assessec to Union of India The said order is illegal and requires to be set aside 1, Per contra the leaincd Senior Counsel c; enu Sri Ashok H iranalh Spt cml Counsel engaged b th tile of Kain Atak n ended ha the erms of th ip eme 1 I p r t d e A es C(5 0 ft I C (LI € 40 site preferred by the shared operators and it is installed in the manner the shared operators requires it and after installation, he Is provided site access upon which the shared operators install their machinery which “as active Infrastructur& in the very same site and in fact, on the tower in the very same site.

Keys of the site are handed over to the shared operators. The capacity is increased according to the requirements and specification of the shared operators and therefore when all these aspects are taken together, it shows that there is a transfer of right to use the passive infrastructure to the shared operators. It is settled law that to constitute a sale, actual delivery is not required. When once the right to use is granted to the shared operators, it presupposes the transfer of that right to use, as held by the Constitution Bench of the Apex Court in the 20th Century’s case. Therefore. he submits that the tax Is imposed on this aspect of transfer. The very purpose of the 46th amendment to the Constitution Is to tax these types of transactions which directly do not fall within the definition of sale of goods but nonetheless the effect of such transaction is the transfer of right to use the goods.

It is in $ 41 order to avoid evasion of payment of tax by entering Into such transaction, that the Constitution was amended and Clause (d) of Article 366 (29-A) was Inserted. Keeping In mind the object with which these provision is inserted, the Courts have to Interpret this provision In such a manner to advance the cause of the Constitutional amendment and therefore, he subnfl that the authority was justified In treatIng it as a deemed sale and levying of tax. It Is In accordance with law and therefore no case for Interference is made out. However, he contends that the learned Single Judge was not justified In Issuing a direction to the State to collect the said tax from the Union of India. Similarly, the learned Single Judge was not justified In setting aside imposition of Interest and penalty as no tax Is paid under the Act at all. That portion of the order Is illegal and requires to be set aside.

He also contended, under the statute, a statutory appeal Is provided to the Appellate Commissioner against the• order passed by the Assessing Authority whose order can be challenged before the Karnataka Appellate Tribunal and therefore there is no justification for the assessees to bypass a statutory remedy and approach this 42 (otft uudt i Article 226 ci the Cunstitution of India. as the ippellants ha e an titer ii itive itid fit acious u inc dv of an appeal. Fienue. these writ appeals are not inaintaiiiable, POINT FOR CONSIDERATION

16. in the light of the aloresaid facts and the rival contentions, the point that arise for our consideration in these appeals is, Whether activity carried on and the service provided by the assessees to its customers constitute a deemed sate as defined under Article 366 (29A) (1)(d) of the Co,tctituttnn nJ 1dki mid threfnrc’ liabt to value added tax. IINDING OF THE ASSESSING OFFICER I t \‘s “ar UI 13 “1A7tethei allowing the mobile operators lo use teleorn tower amounts to transler of right to use th 18 ihe Assessing Queer referred to clause (29AJ of Ai tu Ic 366 of the Coiistitu tion of [ndia and then referred to the Judttnient of the Apex Court in 2Ot Century Finance corporatioth, case as xe11 as Modern Decorators ase and the judgment of the Andhra Pradesl high Court in the ease ol Jasper Acqua Exports ‘Pvt) Ltd., and held as under:

The abo r decisions of die iionh1e High Courts and Supreme (0tIIi has c]carlv h1d that the physical dclix ely ( g ( H i r r I PS i1 11 ir s t I I ru fl Pigflt ii) ‘lt cocos \Viiat is 1l-i-x int 1r \riiC i 36E129r\) (ii) if ‘in Con L uOoi s dic c iiw u lNh i kgal right o usc I o d I r tIa n’cI radii. nra l,—r r} ir; sir—e ru d- rid- ; arc i nt a 1: ‘ Hi h\ 1 o s a. a-c I 44 ransferce has the ircedom and cnoicc of seIectinL5 the manner. time and nature of use of the toods,

Working telecommunication network. involves the process of receiving, ampliring and transmitting the signals. The set of instruments dealing with the above process is termed as “Active Infrastructure” belonging to the mobile operators. For functioning of’ Active infrastructure maintenance of a particular temperature. hu miditv, safety and alSo positioning of the Radio/MW antennae at a particular height is required. These requirements are achieved by using the “passive infrastructure”, ic., Tower and oilier equipments.

How the mobile operator is permitted to use the passive infrastructure is described in ScheduIe 1 of M.S,A. in t.he present case. That means the mobmi e. operators are per.mit.tc.d t.o moo it their Radio /MW .antennae at desired heights and direction cot led with e use of eiinezmi.s prcwi.dn.g other eeehni.eai requirements B iq this passive rastrlIcmxrp rrio[)jle ooerators comm m.i.eate wflfl mobile signals. Thur hih x f xx se is acquired f me.ans 4 45 of a contract called “Service Contraët” read with M.S.A. Though the nomenclature of the contract Is termed as ‘service contract”, the reading of the terms of M.S.A. clearly Indicates that there is a contract for “Transfer of Right to use passive Infrastructure” which Is agoods.

Neither under Article 366 (29A)(d) nor under Sectlon.2 (29)(d) of KVAT Act, Is there a clear prohibition for permitting multiple use of goods like mobile towers. What Is Important is that the legal right transferred to use the goods In favour of a person should not get affected during the period of contract by permitting another person for similar use. In case of Telecom Towers, two or more mobile operators can be permitted to use, by clearly dernarcating the space In the towers without affecting each other rights. Here as per the requirement of mobile operator, a fixed space on the tower at a particular height/direction Is allotted along with other Infrastructure. By means of a contract, Indus (Transferer) transfers the right to use passive Infrastructure In favour of 16 (transferee) mobile operator. by which the transleree gets the legal right io access/use the passive infrastructure,

it is the argument of the assessee that since he is maintainini the passive infrastructure, the eflbctive control is retained by him. This is Hot correct, because as per the terms of the agreement (M.S,A,) it is the duty of Indus to maintain 24 hours/7 days/365 days required temperature, humidity, power etc., for allowing use of telecom tower. Only with these requirements mobile operators have sought. ri lit to use towers. Accordi rigiv they have beeH permitted through. a contract. It is mobile operators who have the freedom. to select th.e type of tower, height/direction in the tower, temperature, humidity, 24 hour pon r and so on. hdus cannot decide on behalf of anymore once. contract is cxecuted Therefore. there is effective control exercised by the mobile erators not by Ty 24, In the. decision of BSNL case, the Hon’b.ie Supreme Court has pre.sc.r.i.bed certain. attributes for a t..ransaction to conslitute a “Transibr of Right to. usc goocI C 47 ‘(a) thc re must be goods avallabk for delivery ,) iliac tnu hr a ennsenu ad iden, ‘va tn the identity of thc toods. Ic) the iranqieree qhould have a legal right to use the izoods consequently all legal consequences of such use Iriducling any permissions or licenses required therefore should be a allable to the I ransferee. Id) for the period during which the transferec has suck legal righi It lia’ to bt exclusion to the transferor is the net earv cojicomitant of the plain language ‘1 the stat rtt. ‘iz. a ‘transLer ‘4 the right to use and nnt flit re—lv a Ia en,t to uM’ the a’)OLl. (ci !,v1flgj titui fcnc. I l’t t uk t c. “ t. o cl’ 1 ups jxi cd oi tl u ‘ v u L’r Lr-i’ ‘re—a, tilt V “e ir:fl jtW’P ! ft, tjfe. - t’i’• at a ‘ijat ‘u !je. ‘3 1 (‘1 1 (it lit’ i i entered in to c’orirract with the mobile operators authorizinit them with a legal right to use the pt.ssive infrastructure subject to the conditions of Master Service Areement. Hence, first three conditions are satisfied.

It is the submission of the assessee that last two conditions are not satisfied in the present case. Since the assessee is authorizing the use of same ‘passive infrastructure’ to multiple operators (up to 4 operators) he argues that the condition of ‘non-executive’ clause is not met For the same reason, the condition of prohibition of owner transfirring the same right to others is also not satisfied. 27, The examination of terms and. condition of the i.’iSA relatin.g to roviding acc.ess t..o the passive infrastnictu.re or exeeu..tion of “service contract” reveals that to start with, shari nti aerator indents recuirement at access to the tower through “i.oreca.st”. in response to the above request, in.ius gives su.tg.estioi ..s, commeirits and its plans for meeting the ‘n— ‘ 49 ‘itt. Then the operator scuds a bite request’ for which Indus will issue “site propo%al indlntlng its p1 n.e tc Implement sitc request along with applicable charges either at an existing site or rreation oi new site.

ThIs clearly establishes that the customer has the effective control over the manner tIme and nature of use of the passive infrastructure by the virtue of his “right to use” acquired through the contract subject to the conditions of M.S.A.

On the other hand. Indus does not have the effective control over the manner, time and nature of use of a specified access to passive infrastnicture allotted to a particular operator. Once contract is executed with specified access to the passive Infrastructure. Indus Is not free to either self use or to allot the same to any other operator. However, 52 only on termination of the contract, Indus re-acquires the allotted access and is free to allot the same to any other operator if it is suitable for him. Though Indus can allot use of passive infrastructure to more than one operator, he Is not free to change specified allotted use to a particular mobile operator. Hence, it Is not true that Indus has got right to transfer the specified use of the passive Infrastructure to more than one operator, though he may allow sharing of entire passive Infrastructure by two or more operators at a particular site. For the same reason specified use or access granted to an operator cannot be treated as on6nonclusive basiC. Conclusions:

In other words clauses (d) and (e) are satisfied In the present facts and circumstances of the case. Thus there is a transfer of right to use specified passive infrastructure from Indus to the mobile operator. which comes within the ainbit of Article 366(29-A)(d) of the constitution of India. There Is a possession and effective control of the specified access of the passive infrastructure by the transferee I.e.. mobile operators C D C D C C D C : 5 D C — D C D C 1 - C — D C C i C D C D r C D C C ) . c D C 0 — n c D C D C : 5 r C i c + - r D C D C D C C a S D C C C D C 5 C D C C D C ) f L a D C C D C a D C 1 z ç Z I ) I ( _ D C D C C - D C — C + D - C D C D C D C D C D C J ) C D C D C i D C D C ( C D C D C D C i r c C — C D C — ) i c D C Q 5 C D C C D C i f ( D C i c S D C C : 5 D C C D C D C D C 9 Z D C 1 : 5 S : 5 + - C 5 r c - D C C C 54 “a tax on the transfer cif the right to use any goods for any purpose (whether or riot for a specified period)for cask deferred payment or other valuable conslderazlon;’

This provision was Introduced by the 46th1 Constitutional Amendment. The objects and reasons appended to the Constitutional (Forty-sixth Amendment) BIll. 1981 Insofar as this provision Is concerned gives an Insight Into the reasons for enacting the provision.

Device by way of lease offilms has also been resulting in avoidance of Sales Thx. The main In regard to a film relates to Its exploitation and after exploitation for a certain period of time. In most cases, thefilm ceases to have any value. It Is, therefore, seen that Instead of resorting to the outr1ght sale of a filnt only a leased or transfer the right exploitation Is made.

The cause for such amendment is the judgment rendered by the Madras High Court in the case of A.V.ME1YAPPAN vs COMMISSIONER OF COMMERCIAL 55 TAXES. BOARD OF REVEXlE. MADRAS AND ANOTHER (19671 021) 0115). tI x a held a uridu: The question thai we have to exanune is whether the yrant 0/the it’a.se Jr explouuzg the fihiti by distribution. jbr purposes of exhibition to the public amounts, in what are claimed to be special circumstances of the case by the department. to a sale oj goods. I3ejorc adverting to these special circilrrzstances relied upon by the department, we may turn. to the terms of the agreement. What purports to be qranted by wcuj of lease are thc £nttre world neqatwe rights of the film and those ny his re deJIrted ui the rell cacti Laus 4d) corttntct in this mcLnner’ 1 the in hi tT1i, iq (hi. q n 11 t t ml’ t I’C(iLlll c(;rtn’117p1(zu-u i n a hue a nçjh( m I by 1 at a 1 z y ii t J(![i(’Fj.

1.5 U qUestLOri Of jcL Wtli.c 1.1 determined in each. case having regard to the terms of the contract under which there is saId to be a transfer f the right to is.e”. 61 The Apex Court in appeal against judgment in STATE OF ANDHRA PRADESH vs RASHTR1YA ISPAT NIGAM LTD. ((2002) [2.6 STC 114) upholding thai view held as under: “3,The respondent owning Visukhcipatnam Steel Project. For purpose of steel project. it allotted dfferent The con tractors, respondent undertook to supplii sophisticate mczchirtery to the contractors for the purpose of being used in execution of the conracred works and received charges for the same. The appellant Here itulicised. Made provisional assessment levying tax on hire charges under section 5-F of the Act. The respondent filed writ peuhen seekin.q declara.tiort exercising power under section 5-F oi’ the Act. OH the hire charrie collected during the period 1988-89, was lUcqol arid unconshtwionat The apeetiurit filed a counter-affidavit in the writ petition contendinq that the resvondcnt u ‘as ie zd.ino highly sophistica d and vain ahl.e imported machir ip 1O the contractors engoqe in ti e (\.(trn of the oroject: u..ork on specified levied, tax: 62 hire charges: the machiierzj was qiven in the possess ton of the contractor and he was responsible JOr any loss or damage to it and and conditions clew of contained in the agree rnent, there was lransler of property in goods for use and on the amounts collected by the respondent as charges fOr lending machinery attrczcied tax liability under section 5 -E yf the Act.

4. The 1-ugh Court after scruiinij and close examination of the clauses contained in. the agreement and loolcinq to the agreement as a whole, in order to determine (he nature of the transaction. concluded transactions between the respondent and contractors; did not involve transfer of right to use the machinery in tavour of the contractors and in the cthse zce of satisfqinq the essential requirement cf’ section 5-E of the Act, i. a, trans/dr of right to use machinery, the hire charges cOileCtea. 01] LOS rC5/Jofldent j?om the con tracts were not exigthle to sales tax. On a careful reading and analysi of the vanous clauses contai.neci in the ac.ireement and, in. pa rtict..dar, lookin.g to clans 1,5, 7,13 and 14, it becomes e ____. ___.i, _-3_--, ..,______,_-_1. 1( riqlai to use the inachineul tnjarour 01 contraCtors. The lliqhi Court was rkjht iii arrii’inq at such a coiiclusioii, [Ti the irnpll(Ined order. iS qi(ued (111(1 rkjhthi so iii our opinion, that the c’ttectii’e control ot the IltciChjnCrLj ecen while ihe IllaChiIlerij’icTlS iii use ol the coiltracz’or was that of the respondent corrij)anij.

(1w’ contractor was not free to make use of the mczchinery fOr the works other than the price! work of the respondent or riioz’e it out during the period the machinery was in his use: condition that 11 me contractor i could be respom isible tor the (‘ustodq of the machinery mehile it was on (lie site did not militate aqatnst respondents possession and ontrol of th rnachmenj ReIiar1 R ciiu on a ( in 201 CENIURY FINANCE CORPORATION LIT) & ANOTHER vs SIAIE OF MAHARASHTRA ((2000) 119 SiC 0182) wIieien 64 There arc (29A) qf article 366 are not actual sales within the meaning of sale” but are deemed sales by legal fiction created therein, The situs of sale can only be fixed either by the qppropriate Legislature or by judge made law, and there is no settled principles for determining thc situs of sale. corflicting views on this question. One of principles pmviding situs of sale was erigrafted in Explanation to clause (l)(q) of article 286, as it existed prior to the Constitution (Sixth Amendment) Act, which provided that the sims of sale would be where the goods are delivered for consumption.

The second view is situs of sale would be the place uherE the contract is concluded. The third view is the place where the goods are sold or delivE red would he the suits of sale The fourth i ten is that where thi ssential ingredients which compk Ic i sale are found in majonty would be tht Therc ii ould be no hfjiculttj f ii he e I I a lxc ot toed f sale z ft it ft Lot t hi pp pri ti cqt Ia ir a ft on fix I i ctlo; f ci Al L UC’(t I U i E 65

26. “Phe nevi quesuoii (hut arises /or considerahoz is, ii’hew iS the taxable of the riqht to use awj (joods. Article :66 i2SiA) (dl enzpou’ers the State Legislature to ena I law imposing sales Lax to use goods. the transfer of the riqht Tlu l’unOlIS subcIaitses of clause (291] of article 366 permit the anlposition oJ tax thus: sub clause (a) on transfer of property in goods: sub ClaUSE’ transfer of property in qoods deliveru of goods: sub clausc Id) on transfer of the sub clause (ci oil (h) on to use goods: sub clause tel on supply oJ cjoocls: and sub clause (fl oil supply of services The words and such transfEr delivery or supply.

Iii the latter portion of clause t29A}. there fore. refer iv the zi’ords traisJer delivery and supply as hcahk a. ed luu, . the tTaizS fei of yocis 1LIII b (1 (jeemea suk’ ui the USEs sub LuHs lie de1uri of niat b; (it] )O 1’ C i 1

( )f 3 Sc;, supoly rif ‘J axis nz’J crL’lccs r,j ecLmi: I’Iil nc d (lii hi ‘ c r S 0 c C I I (1 Ii )f Y 3 1 1 q ( rr( d ‘,‘LlL i’ 5Cc 14 Sj ( 20 ‘1 3(1 ‘1 66 is to he irgposecl not on the transfer qf the right to use goods hut on the deliverzj of the goods for use Nor in our view can a transfer of th right to use goods in sub clause (d) qf clause (29A) lx equated with the third sort qf bailment rçferred to in ‘i3ailrnent’ by Palmer, 1979 edition, page 88 The third sort referred to there is when goods are lçft with the bailee to be used by him for hire, which implies the transfer of the goods to the bailee, In the case of sub clause (d). the goods are riot required to be left with the transferee, All that is required is that there is a transfer of the right to use the qoods, In our view, therefore on a plain construction of sub clause (d) of clause (29A) the taxable event is the transfer of the right to use the goods reqardless of when nr “bether hc qoods arc deluered for usc What goods should hc in c xisiencc so that theg may be u ed And further ontrac n a spc ct thereof is a is required is that )ClilreotZ c ned I i E Inc I c 11 nea, r a n goods 0 h Is qh sc he i Ia a d c an fccrci ,le k r f a Is 30d 67 right to use them, though It may be thai In the case oJ an oral or Implied transJk r qt the right to use goods Ills effected by the dellvenj of the goods

ArtIcle 366(29/i) (ci) (lather shows that tax Is not on use of goods but on the levy qi transfer of the right to use goods. The right to use goods accrues only on account of the transfer oJ right. In other words, right to use arises only on the transfer of such a right and unless there Is transfer qi right, the right to use does not arise. Therefore. It Is thetransfer whkhls since qua non forthe ft the goods are available. tight to use any goods the lransJer qf the right to use takes place when the contract In respect rhereoJ Is executed. As soon as the contract I’, e’.ecutecl, the right is rested In &.j ,stt. I’ws. 1?ic stats ul tc cable ctcnt q ,tah a at’ add bE ihc transJc T a Inch legally translE rs ‘l)e ria’jht 10 USC (JOOd%. It. other words. if flu gnb art araflable- rvresp..ruxv’ 7! t&t where ‘he S are 1 aieci and a u’nIL ; ront ‘ 1% enc ticztc akmecl EU lclk ce.uson IE’ f)r.ir,u I b’r “C ;r,ir,..tr ‘‘( r”,h, ! Inc tj, nji,, i3z’t • •.,e’ S.! 1r r’” .; ;ry I’m 4 fr’j;q•’’w .4 fls ,;rj w,e goods it rnarj he effected hg the delivery of thE 28 1Vo authoritq of this court has been shown on behaU of respondents that there would be no completed transfer oJ to use goods unless the goods are delivered.

For the ciJbremenutoned reasons we hold that providing telephone service by DoT which comprises cillOtmrn( qi number Installation qf an Instrument/apparatus and other appliances at the premises of a subscriber, which are connected with a telephone line to the area exchange to enable him to have access to the whole system, to dial and to receive calls. In efJect falls within the meaning 01 the extended definition of ‘sale” viz. Within the neaning of - the transfer 01 the right to use any qoods and the fact that It Is described as service zznde, 1885 and the Rules made theteunder or under the Ftrtancc Act 1994 would it ‘viiiat’ rJalnst t’lE s.qrnc I ‘trig .z “ale t ‘rthvz nit rnauiqoftht 1. I’ 4cr the ifA. 31) ‘ Isit t iii z’ ty vt t, .ic’’ct’t’ ,stiiirPcrn clnohi u Inian ncr ti ol ii. .rew t nail teki,u, ‘n ‘Ii.ag.et itii dir p i.J.’i’’. )3 ‘lie i n’1ua’ “ 13t’ii(’i. ‘.flit’ht ti’. if ii’j ..! I tic4 CU’ ‘a U • iTs,.’ . II’ 1)’ j. ‘a (1” Ii’ ‘A ii. saul quesi on was referred to a iartcr Bcneh coiisit in of Three Judcs in the eac of BIIARAT SA\C1lAR \I(AM LTI) & AXOT1IER xs LNIOI\ OF 1DLA & OFHFRS ((2006)3 5CC 1) In the said ease, after referrim to the aforesaid points controversy, the Supreme Court held that the said iew is not correct and laid down as under: “72 In.

34. in determinina the sit us of the transfer o.f the right to use the goods, the Cou.rt did not say that de1irerri of the qoods was inessen tial fbi’ the purposes qf completing the (sans Jbr of (lie right to use. Th.e emph.asised in the quoted onions evi.dences pass aye Lha.t (b.c goods must be cux.dio .:he uftp the trans/br of the riqht ti) 11 .se the 76 goods takes place. The Court also recognised that for oral contracts the silas of the transfer may be where the goods arc delivered see para 26 of the udq men t).

In our opinion, the essence of the riqht under Article 366 (29-A) (ci) is that ii relates to user of goods. It may be that the acw cii delivery of the goods is not necessary for effecting the transfer of the right to use the goods but the goods must be available at time of transIr, must deliverable and delivered at some stage. It asswned, at the time of execution of ann agreement to transfer the riqhi to use, the goods are availcthle and deliverable. If the goods. or what is claimed to be goods by the respondents are not deiiverc..hle at all by the service providers to the subscribers, the question of the right to use those goods, would not arise.

in Stare of AP Rashrriq a !saz Ntqam Ltd. it was claimed bu the Sales Tax Auttorities that the trcusacrion td which the owner t.f certain rnacliinenj had made th.ern available to the contractors was a sakr The Court ixlected the submission saying that: (SCC p. 315, para 4) / / Thc transaction did not ITZL’olre (muster of right to use the rncichinery in dvoi ir of con tractors, the effective control of the machinenj even while the machinery was in use of the contractor was that of the respondent Company; the contractor was not free to make use of the machi, iery for the works other the project work of respondent or....”

But in Aggarwcil Bros. v. State qf Haryana when the assessee had hired shattering in favour of contractors to use it in Ute course of construction of buildings ii was possession of shattering materials was transferred by the assessee to the ens torners for their use and thE...refOre, the,.•re was a deemed sale within the meaning of sufeclause (d o.f clause (2th A) of Article 366. What is noteworthy is that in both the cases there were goods in existence which were delivered to the cool actors fIr their use. one case there ens no intention to transfer the riht to use wove in the other there was.

Hut if there are no delhercthie aoodstn existence not n tT is case. there i.s no t rans’r 0) user at alL Providing access or telephone con nection subscaber possession ol tlte electromagnetic waves anij more than a roll collector puts a road or bridge into tle possession of the toll paljer by ifting a toll gate. Of course the toll payer will use the road or bridge in one sense, But the distinction with a sale of goods is that the user would be of the thing or goods delivered. The delivenj may not be simultaneous with the transfer of the right to use. But the goods must be in existence and deliverable when the right is sought to be transferred.

Therefore whether incorporeal or corporeal. tangible or intangible they must be deliverable, To the extent that the decision is State of UP. v. Union of India held otherwise, was, in our humbIc opinion erroneous.

The entire infrastructure! instruments a c e Im ‘ controL and possession of the petitioner at nil ises and there is neither any physical transfer of such goods nor any transfer of right to use such equtpmen,t or apparatuses. 79

To consliluic, a tTanso.c’tton for rnuqfev qf the right the qoocis, transaction must have the lollowung amibutes to usc.’ 11w (a) (b) (ci (11 there must be goods available for delbery. there must be a consensus act ldern as to the identity of the goods: Ott transferee should have a legal tight to use the goods consequently all legal consequences of suth use including any permissions required Iherejor should bc available to the transfetc c licenses , r Iho perl& .aang vrirufrree has su” h leqcd riQhI. Ii ha ic’ £ 1w lusiw o h raisJcr r ‘Oh, nPziTarlh “ the It zravu,i qf in ii . a if tiLe tvohi u zsC tad tic ironsii .r’t;elij c€. Licence . “st the !vwda . cii it. is Ow Ar a j nnrir. ‘711511’— .1.d ‘)il ) L : tie .4 1 80 to be t1(msferrccl, the owner cannot again tin sfer same rights o1iLL-rs.

The Apex Court of AGARWAL BROTHERS VS STATE OF HARYANA & ANOTHER REPORTED IN 1999 j’9? SCC 182, has held as under: Iii the aforescud case. “the asscssee’s ueti lure shwtering lo builders aitd contractors who use it in the course of construction of buildings. It is on the hire charqes, sales tax was lenied, Challenging the said imposition of (ax, zLnit petitton was filed before the Pugjab and Hanjaiza high Court, The argument WQS satd irnposliion U’aS unconstuultonaL, The high Court found as a matter the poSsesSoO 01 file hntterino rncth-rzui fact, u’is arts]c ed bu hic issessee o thel ct for er for use during rile rstrutthr I I,tifrbti Ihe ii Ia ci uc re i jJ u’ ira i lie I 4cr nj ‘ft.niiçf ‘lie pcriocis IL 0 ?tiriIlic(r ‘a a ,,tcudcf tc1 aLic ‘f ei rz’oo sue to do a c Os II 01 54 ‘dl C oiirt of Part Clicrileriyirig the sad finding before the jv it was contended har’inq regard to thu Erttrti ‘* lied ule transfer couu’rnplaied bq Sub clause d) of clause (99 1) of Article 366 is a Legal transfer of the right iii ioods IT haS to he a transjer ojgoocls. perrifanent.

1.’ U p* .1 uah r / 4 nt ‘tray ‘)U’Th’SV c1” wi 1iU as- r lvi Ac U sac .1 ir no I to i’s •fl I ( 1(1% (or ,r de lerrud JJcsunhc fly ni k V gflg,,fl “a ‘Pfl1•7’ Li V r rk’ira;’:’;n ‘4 ‘fl if it c j (:‘.‘;.t... •..k.•I • ‘. • ‘. ‘ ‘4% . e I . (‘77g• 11 84 though an essential title to the goods. although. may remain with the transferee, a transfer of right to use the goods would also be a sale. Even a lease of goods would be a sale. Thus, bzj reason of the said definition, ingredient of a sale as defined in the Sale of Goods Act, 1930, inay be absent, the transaction may amount to a sale for the purpose ot levy of sales tax under the Act, What has not been altered by reason of the said provision is the meaning of the word “goods”. In this case, dispute. Molasses is indisputably goods. It can be transferred for a definite price. the concept of goods is not x licence, the deed of Molasses manufdctured in the sugar mills. was the property of the appellant and it answers the description of “goods”.

In view of the terms and conditions of appet lam was the owner thereof The Company was to use the molasses jOr the purpose of man uldcti ire at suaar in its fricmory. Transfer yf such molasses by the appellant to the Company;, would riot be a transfer hr.’ wa of transfer of stock. is transfer of t.he or..t.nership in goods where for the Cornpa.ny was’ to pcu.J tl.e price to the appellant. The transaction., thenJOre, beyond any It.. 1— 85 by way appellant doubt. answers the descripton of sale within the meaning of the provisions of the UP. Trade lax Act. 1918. For each supply of molasses the appellant would be entitled to the price thereqf The amount towards the price of the goods could be paid either by way of cash or deferred payment. Instead of cash, the price qf molasses was to be adjusted from the amount payable by consideration jor use of the mill. Such a mutual arrangement is merely one for the purpose of adjusttncj the accounts.

The transactions between the parties are in effect and substance involve passinq of monetary consideration. It would. thus, come within the purview of the expression “arty consideration”. which t.apression would take colour from deferred payment being a moneranj payment. hut does not: some other monetary naument by way of mutual a.rranement, The parties are not bcutertn.. or exchanging any goods so that the element of rnonetun consideration is absent. Money is a legal its character of tender. Cash E.s, valuable howet.’er. narrower th.nn inones. The L.vords “deferred payment” valuable Co sic.iercthon:’ erthux.,e the arrthit of consideration “other 86 beyond rash only. Entry . I qi list II of the Seventh &Izedule to the ConstItution 0! IndIa provides (or sale 01 govac Once a stile of goods takes place, the State heroines entitled to impose tax on sale or purchase qf goods. For ronstruction qf the words sale ofgoods’. now the Court is not necesscu’liy required to fall upon the definition of sale of goods. as contained in the Sale of Goods Act.

1930. It has to be governed by Its enlarged definition wider Clause (29 A) to Article 366 qf the Constitution India. Once an essential component of sale takes place. Sales rat u’oukl. Indisputably, be payable. By reason of stick an arrangerncnt by the parties. the Stoic ts not creatlnq a new taxable event nor Imposing a new tax which uns unknown In law. - a c r I STATE OF ORISSPs AND ANOTHER VS A&A7ICCASESLrD, oricdm(2OO7)bSCC766 ‘hrrcrn Ii p” C nirt bcld a. r ‘1141 ) 1 aIafJ I ec nd a I rat u Jispi ft tha. _n It. )13 l I ,,si’n .e.,l • t S V I it. g It d’r £ s t I 77’ h ‘. ‘ • p’,. ‘ —l a charge loriii was crssessee jree horn paijinent of any charges. However, thereafter a fixed amount was levied by Jbr overrelention. According to the impugned judgment the safe! charge Jor overretention was in (he nature of penalty imposed on the customer in order to dissuade he customer from retaining the cylinders.

The assessee required empty cylinders to be returned so that the said cylinders could he refilled rind sold/transjrred by way of loan, In our view when the said goods (cylinder containing medical oxygen) were given on loan to the customer the transfer of the right to use the said goods came into existence. It may he that ror the first 14 days the said loan is free from payment of any chwpes. However, exemption from paqmnent would not militate against the concept qf transfer of the right (.o use the goods.” Atain, the Apex Court in the case of ASSOCIATION OF LEASING AND FINANCIAL SERVICE COMPANIES VS. UNION OF IJDIA AND OTHERS reported in. (201.1) 2 13CC 352, at “35-: Accoratno Ic- Chirtu on Con tract, a hire pu.rch.ase reement is a vehicle of instalment credit. It o:n. aqreemerlt wider .L.vfraI a.n owner isis 88 chattels ow ott hire cuidJizrilwr agrees thai the hirer may either return rhc goods and wnnlnare the hiring or elm t to purchase the goods when the payments fir hire have reached a sum equal to the amount oj the purchase price stated In the agreement or upon payment of a stated sum.

The essence of 11w transaction Is bailment ofgoods by the ounr to the hirer and the agreement by which the hirer has the option to return the goods at some time or the other (See paras 36.242.36.2431. Furlher In the bathnent termed hlre” the bczllee receives both possessIOn of the chattel and the right to use It In return for remuneration to be paid to the ballor lSee jnra 32.045j Further. under the head 23 equlpnent leasing . U is ckplazned that itis aform of long term tinanrlng In a Imata Wasc. i is the. lessee who U’ fltt’ equlpmtnt o In uppliesi by the dealer thc nnnufactwc t. but ffutancc rqnnj pic idcs ala tird the ltssor tcqwres It thclse’ ‘ejr tI& I ttc cuzpuenandalb expev’c’d Lie Dcrncjthe.jcncxlqj Cit It. Cci’ P and rc u’wds vi OLL’nLssluI are’ trwL’,ierrL’cL “ Lecsa u’hc’ bca the risks c fr, ss Jestnsc tznn orid Jcj r villa ri ill’. nI’ ‘n’zp 17w fr,üi.i. n; Itiil ii “iitliill’ % f’rruics 1” lst’Vj ‘iitZ a Ct • h.t it’ j’ini’6C’ 1’:e 1 .‘ rice S t ‘.nr, :• 4 ;, •(‘tj - , j.• 89 prematurely, reversionary right). fl’ Ow lease is Lcrniinawcl the lessor Is entitled to recoup us capital Investment (less the realisable value of rite equipment at the Lime) and Its expected finance charges hess an allowance to reflect the return qf the capital) hpara 32057). In the case 03 hIre purchase agreement the periodical payments made by the hirer Is made up of: (a) considerationfor hire (b) payment on account oj purchase.

Thus. reliance placed appellant(s) on thc expression spliWng up K.L.Johar rasc Is misconcelved because splztdnq up refc rrcd ti in K L.Johczr case was. is stated above. In regard to valuation cutcl nor In cgarI fri ‘opetw ‘c ifc .. hffcrc Wase’.% nnrncljj. n ro frvec-i r qpss cf fncnc al livirinrir,’ lease a i. ‘rc’S1Lr fl%. ‘cas cd x t ,hvre Is •n azltsrdtrziurt ‘ii the. matter iic ip; ‘hauls cjpp’c zctt d ti •b qtt ‘cit viII” a nji, idp- u_inn vu r1 ix ;e. ic I nimi; It fl: tat si ,j i d( IL It Wi ‘ ‘1 t 99 l “ 1 1 I ‘11.1’ 4 • ‘. r’.r ?w1 , a, , 90 finai ice! interest cli urges. adjudicatzoi i. under the Aci inns u’arrantcd which has nor been done. One must also bern ui mind 3AH(29 .U is essentially sales lax specijic It was brought in to expand the tax base ut’htclu stood narrozt’ed down 4riide because of certain judgments of this Court. That is the reason jor bringing in the concept q/ “deemed sale under 1L’hLcll tax could he imposed on mere delivery on hire purchase [see clause (cJ/ which eApression is (tlS() there in the second liiuth f the said article, From ihe aforesaid judgments, it is clear that law on the point is fairly well settled (r e’ c s in’ id J traIft jse’ h nitrasii ut tun Hiwm et, xvhih uiii irib astructui e 91 possession of the infrastructure Except having access to the facility which the sen ice provider is providing by virtue of possessing su(h infrastiucture, no such right either in the infrastructure or in the other property of the transferor is transferred to thc transferee, Providing access does not amount to right to use goods.

In this background it is necessari to look into the teuns 01 the eon1ra t untered into berveeii the parties, which is not in dispute.

On record we have several contracts Though most of the terms are common, there are some variations, Therefore, is necessary to look into the terms of the contract understand the nature of the activity the assessees is carrvin on arid whit is the subject matter of these agreements. TERMS OF THE CONTRACT 1-7. First of the nntra’ts daiud O7.O:52oO is entered into between M/’.Tndis litfratel Limited -1il1 Biarfl Arte! Linjtc Clan ) fi( ciSC 1 ( I I fI1iiti’ii’ l 11 15 b rOll’ (I iT-( I i’ Jo Jflr(ç.rJ( UT( iO luth ‘ ‘‘‘,? L F’ Ijns ‘i U an LenTzas, haclchaul connectivity to Sharinq Operators network and other requisite equipment and associated civil and electrical works required to provide telecommunications sen ‘ices by the Sharing Operator at a telecommunications site other than Pass ice Infras tn icrure. (2) “Good industry Practice” means exercise of that degree of skill, care, diligence, pn idence, foresight and judgment which would reasonably be expected from a skilled and experienced operator engaged in the provision of services similar to the passive in frastructere services provided by Indus: t3) Passive Infrastructure means at any Site. iii[}clsructure located cii such size which is permitted by Law to be shared by t.he Parties, including but not limited to the tower, she.. her, diesel generator sets, air conditioners and electrical and civ 1.1 u’orks: Clause (2): She Access 3’ s “ / u 96

2. 1 1 provide Site Access Availabilittj to the SI iciririg Operator in accordance with conditions of this Agreement. 2,1 ,2 Throughout the Term o this An’ement. the Sharing Operator shrill be entitled to provide notice to lucius of those Sites in relation to which it wishes to he granted Site Access Availability (a “Service Order” 1. The process for issuing a Service Order shall be as specified in Schedule 1 (Site Access Availability)

2. 1.3 Indus shall ensure that each Site is capable accommodating Sharing Operator Equipment in accordance with the standard configuration set out paragraph I of Schedule I (Site Access Araulabiar). Am.j additional requirements shall he specified by the Sharing Operator in the Service Order.

2. 1.4 in the event the Service 0rders Site(s) mean. that the cwaduble Pcrssicc .injrastructu.re as 51 nc. Site(s) are over 97 suhscrthed an applicant whose Service Order was received by ladus prior another & i vicc Ord r shall be given priority by lndus while allocating such Passive Irtfrastructure to the relevant applicari ts 2, 1 .5 With respect to each Site in relation to which Indus is able to grant Site Access Availability, the parties shall execute a Service Contract in accordance with the procedure set out in Schedule 1 (Site Access Availability) and the provisions of each Service contract shall include the standard terms set our in Schedule 6 (Standard Site Accc ss Terms) Each S rvicc Contract shall be duly stamped md thc appltciblc cOrrp duty shill b I I e I nag Opc a 98 [urns shall provide the Sharing Operator necessctnj means 01 success jór the purpose of Ingress and egress from each Site accordance with the terms of the Service Contract. Provided, however, that on ltj anthorised emplotjees of the Sharing Operator or its properly authorised suh contractors allowed access to the Sites,

2. 1 .7 The right, title and interest in and to the Passive Infrastrucwre. including any enhancements carried out by fndus, shall vest with Indus and all such enhancements thereto shall be at and expenses of ladus. Enhancements in this context means the auameritutton in capacity earned our bu to acrueve increased sharing. Clause 3 Operation and Maintenance Services:

3. 1 ProvLsion of Operation, and Maintenance Services: lucius shalL procida Operation .Mai.ntenacice Servks:s in retavon to eac. 99 Site and the India, hIrastnic lure at each cite in aixorilcuice with the terms set out in Schedule 2 (Oprators and Maintenance Services)

3.1.2 The Shczrinq Operator the operation all SharingOperator responsible maintenance €4’ Equipment In order to conduct such operation and maintenance activities, the Sharing Operator shall have the right to replace, repair. acid or othenL’Ise modify the Sharing Operator Equipment any portion rhereoJ ,frequencles over is’hich such Sharing Operator Equipment operates fl-re Sharing Operator shall & provided uc ens to tht Silt’s in ci ‘cordance with paragraph 2.9 qi &hedult 2 Iflperatzon aid Warera c Scaics) inlcss nbc a” sc. spc’cac’I 1 i a ‘i art SPIt,. C C’,niract. icr the l)1’lPk%t ‘1 ta july aLit” flpt ullu vn t’nc c ‘i’a W wit Us pro’ ‘de it, sin Slicu’rtu Orw” vo, ,h’ I’t “it L Ca S I 10) Piorided !iou’ercr, purpose QJ ingress and egress Jrom c’cLcll Site. oriltj alLtllorLsed eritpLoqee’ of the Sharing Operator or Us properlti atahorised sub contractors (hat allowed (PSS to the SUes,

3.2 St and at d of Operation and Maintenance Sen’tces: indus shall ensure that

I the Operation cit id Maintei icince Services are provided: (I) (irJ accordance with Good Industry Practice; in vompitance with ill Laws by an (uleclucite ntmzbcr of vii aLit i qi tahf ic d. skilk d or d tj)cflerU ((J P(’!SOTTIL( I

3. 2 iiO11r sI1ul! T15tlfl 3nt iIi (Joc ra1t Iazritii on ‘ci V’C (I -Ii ‘)pT;zrir ‘ito! ‘dOo 1oi’’’ c 4 i ‘, 3 Ii : , -rn, ‘;o S I0I 3 2 3 indus shall ensurt that it puts In place processes and procedures to monitor its perftrmarwe czyrtins! the Operation (LI id Maintenance Sen ‘ice Levels cii zd shah report such irforrnation to the Sharinq Operator art a monthly basis 33 Operculon and Maintenance Servic’e Levels 33 1 J iridus fails to provide the Operation ai td Waii liencince Services in accordance zn’tih the Operation and Maintenance 5cr vtce Levels heti Operation Maintenance Sen’k e Credits becointe payable in ciecordatice with Schedule 2 iOperauon and ]‘ Iczuiu ‘ii ance rj Shrinu QoL ator man Serr U csL quart nly ha. is wid with a noticc 01 30 dazs. deduct uiqj such (JperduioH 011(1 1ICL1t11P1Vi1U€ Scr( iit frar, ( 111011 TC(()1C 1u ()ru’’w ofli 102 :3.3.2 The Ikzrtles agree that the Operation and Matnienance Service Credits are an estimate of to 11w Charges to reflect thc. value cpJ’ services and are not a penalty. and art; at the amounts this Agreement. the adjustment stated in reasonable. J I Service Failures jf Indus falls to pefonn the Operation and Maintenance Services In accordance with this AgreemenL then. without prejudice to any other rights or agreement or otherwise, the Sharing Operator may require Indus by notice In writing to carry OUt i, ‘nto rhc causes qI such remedies It may have under nvectaqatlor carry out such an nvetiqatbrt a its )UT COSt ird shall prot ide a .epn’l of tru’ectlgazkn to ‘he Shaiui.q Operut n. I Indv RvjI.ts I. %)‘t Ill I j 103

1. 1 I it’Iic’rc the Sharinq Operator, Approved Contractor or any other third party requires access in any Sire Jor any reason, to require that surh (recess is supervised by Inthis or its nurninev: and

4. 1.2 to use rind grant access to any Site. in icluding arty lad us injmstructure, br the provision of such other services to any party or for such other purposes as Iridus may in its discretion decide to support mm time to time, (. Charges

6.1 Payment oJ C harges Indtis shall charyc (tad invoice the Sharing Opcate br tht 1htrq s LI aco, dane wnh Schedule 3 (Clrarqes). The Charges ci 0 1. Sc&dzik (3 ‘harg s) hail be on e• itcti hosts nfltn7ieflez HQ 00 Pnn’frlt’d. oirrez’t’r ti. Ul SucIz ririr:uai r ns or’ J 11 Cf arqcs ijicU 11 ‘Lilt ;ffj ;[ 104 (5.2 lkzynwnt Terms 6.2.1 Su4ieci to clause 6.4. cdl invoices submitted htj Inthis in accordance with the Schedule 3frhaipes) shall be paid by the Sharing Operator wIthin 15 clays uj receipt.

6.2.2 All Charges. Taxes. costs and expenses Agreement must be l,uolced by Inclus as pan qf the Charges within 5k (6) months of the date Indus is first entitled to Invoice such sums B S Late Payment If cz, her Partij hua not pewl any uavats ‘4j the ir diw date all such unpaid sums u’lll accrue lntcresr cit a ;ate equal to t.hc. thin pn’rniltnq uae Bank ‘.4 IndIa PnmL Let‘ding RaIL ft . tic s!1c ixznq Up” (zrorfi1d’. ic pa c. y nw ir ii ot c c h i h i. i)cputcd liuu l’c’l•’1 .11 X Cl(.VjS aaLa’tcju •‘ j •fl ‘rr” n fr r f• 4’ r. LC Ij” ‘; :‘ fl r’a’uAi ‘hut • kit td C x ) ( i ‘J If J(iVC Sr ‘_.. 1 105 he ( ircic to ii’tiich S[it! i1lfliCe relateS shall cease to apply until such (line (AS the relevnizt invoice is paid in lulL In aridition. upon i/ic expini n/ the 00 days r)enod. Indus my, at any time, choose to terminate (lie relevwzt Service Contracts and the relevant Exit Amowiis shall be payable by the Sharing Operator in accordance with the relevant Service Contracts.

1 Disputed Items if thc’ Sliariizq Operator or liidus reasonably and in qonci Jcuth disputes: (ii tin obliqatiori iv pau port yr all ol ciii invoice submited by indus under this i.qrceinent: Ill part r U I Of Sii s Sei vice ( redn or )p 1110 ird Mo lit fl( Sc c n an i Ui rfrP. ‘j1t’ r;ft.r b.4. I 6,4.2 643 06 the Party cflspntinq tLie invoice or Site Access Service Credit or Operation and Main Len cmce Service Credit. as the case may be, must notify the other party in wrUinq of the amount of the invoice or Site Access Service Credit or Operation and Maintenance Service Credit which it disputestihe ArnounC) together with detailed reasons why it considers ii is not obligated to pay the Disputeci Disputed arnoun t. Such party’s failure to pay the Disputed Amotmt will be deemed not w he a breach of this Agreement. Such Party must pay the undisputed balance of the irwoice or Site Access Service Credit or Operation Servtcc Credit accordance with this Agreement; The Parties must as soon as reasonably ctrscuss reczsoniabie ertdeavours to acrree how 107 the Disputc d A mourn payable: and

6.4.3 IJ the Parties arc unable agreement pursuant to clause 6 4.4 within 10 Business Days. then either party may refer the matter to dispute resolution accordane with Dispute Resolution Procedure,

6.5 Other Costs Ihe Parties agree that the Shanng Operator is not liable to pay any amount under this Agreement unless evpres sly stated in the Agreement 0 Right to Advertise on Passivi. Infrastructurc 10 1 Phird Partu Adverttscment i arn icen r. )r r n r oil Stfr .r A 108 I 02 impact nrt die Sharing (iperarur [richis shall use its beSt eiideavours (0 ensure that the Lease or licence o/ space on a She or Passive Infrastructure on a Site [or (zdverusing does not adversely aJjëct coIl! iectwtty. network Active Injrastructure of the Sharirig Operator Indus shall proniptlq remove or relocate any advertLsement Jrom a Site or PassIve Infrastructure Site advertisement causes a material adverse cjjct to the conrtectu’ilz.J. ,ietu’orlc or Active 1rJrastructu.re of the Sharing Operator

Flie 2r areemeiil eritci ccl between Essar TeIe’iv IpIvastni °‘v vriate Limited rd odafon Lssi Linured arid \• odatona Essar \io, ie Ser\ ‘cc- Limiuea and rc, n hich is ri led a \Tai e-r SLrace , Ai cnint on 2d i Power uppit

4. 1 for ead SIt( I HOLL(T cUflpiTI ol1 be orUu;I j’rsLij cutn± hf 4 Ic Ld r)lt(J(IC It ii!! H 11001 1” 0 !!!iii1H1)H C 109 battery back up shall bc designed to provide 4 hrs back up Ibr sinqk’ 13Th DC’ local qi 4/4,’4 con7juratbn.

4.2.2 The lrgJrastructzzre Provider shall take cant to utilize the cheaper source of power source like SEB power over DG set j’oiL’er as ci measure to reducefuel cost. Allfuel reimbursement bill shall be accompanied by sire wise DG running log sheet and Cellular operator shall have the right to carry out random fuel reconcillalion audit at Cellular Operator’s own discretion.

42.3 The poum consumption betwecn sharing operalorc shall be divided based on the DC’ c un-cat ‘nsumption ..EpJ’ ‘he rc specwc wstems and Utc Irgrasrructure Provider shall install s uabk mcastsrnq ncasure lEcharrsw 1)111 s’rc u’t axcnrdiriqly rc in. us ‘n nt hills All ;xnrer iall & nrc’s qwiniccl ly lu-c is curd Cc iliaci flpc nutor shall hat , ujht to C .9j our random p ‘C alc ulailo L c’cnlit L C E £ ‘ ,‘c r1g’;r— r’ 4i’ rstin. 110

3. ServIce Level Agn’enzern lnfrasiruciurt Provider shall provide jbllou, lnq services: n.1 Provider Infrastructure supen’lsion. operation and control oJ Services relating provldc’ lnfrastnwture equipments Provider at the sites. provided Infraslrucwre , 2 To cartj out perloclk servicing!ovethoiding (Ft Diesel Generator sets based on actual running hours. Air Conditioners & other Infrastructure Items.

3.’? fliwne: Infrastructure Provider shall ensure the .tfra, lracAJrc’ J1 mnnthlz, cc, ulpnnt’ius. spHw .4 p1 ondccl IT!!; cLslruc ‘flAir 1 IflS’. Inovider 1 ir ataaqc ‘Tl CU” cUtr(tcJC (vrs).cs “1’ MIt’s take;’ ,rf’nn rh.’ l’c sa frEd isPr kci .zsn ‘ ‘c” z ‘IlL Slit’ II1’L dcaj ‘ tl’je’l&irUt. .flflTfl. .‘1 “‘C Yt ‘1 HI

5.13 Iqirasiructure Provider supply at: zulU ensuie power 24/48 Volt DC Ibwer supply. Surge and lighting protcnlon at the Input ofAC power cupply.

5.16 infrastructure Provider shall ensure proper access to ShelteT/Room and Tower in terms of lighting, access lndders, 24K? The third agreement Is entered into between Bharat So.nehw Niqam Limted and Wireless IT Iqfo Services Lid.. which is styled as Infiasiruciure Sharing Agrecment. which Is dated 1 8 ‘ctober ‘0EV’ I7)c rrlevant clauses it ‘his aqrt C meld arc r, fnllow% & OIt QI LR1K1 S IVJROltIO 1 0 Flits cp ItTV t. b t the i-’S.NL 1a. ‘went . v,rwwis ,crhzucal £ K It_frost . u • i or ‘t 2 , S I.

2.)

2.2

2.3 2 4 112 The Ittfrasinwture prnvider has the capczbilliy to acquire. build. operate and maintain telecom In!rasirueture. ThIs document lays down the qeneric requirements qf I3SNL. which Is a broad scope qf activity. All acth’ItIes/sub actirities to meet the KPL/SL4 are assumed to be under Irjfrastructure Provider Scope. Infrastructure Provider shall be responsible for complete site development starting from site acquisition to site RPL 0 & M. warranty support, preventive & routine maintenance. AMC equipment/facility as per SM Jo, all passive Infrastructure elements. availability services Infrastructure Provider ts responsible for all statutory .mpllancc. ic qular haicrIng u tilt rnuniclpal/ Got ‘ernmc; ii bodies. pcujmcnt qt clatiltory consumptlnr. evies. monthly harqtsfpoze 1 1 Ic ‘ ‘limmeic mbiqtuti ‘hc.’ passu’r ,.nlrnsrn, rtiirc c lt’mc rfl.% ir luck bin. are ncd Inca1 est lcd c tlic oWn ci e C wa.. In (h ci;,’ I’S. k ‘ fl1j’ Pt’,,’! Ii’ii,. nj gpq4 hr ( i.J’jinr, r t L’L’ 1, 113 • Tower • Shelter/Room • Bcutenj Sets • Power P1Wit • Diesel Generation set • Servo stabilizers, static stabilizer, conditioning equipment. • Air Conditioners • Incoming EB connection • Site electrical system • Site earthing system • Lightning protection system • Civil Construction • Fire Alarm System 77w Injraslruc ture Provider u’dl provide space Jor installation. ic’ SLA shall l-t. aplwabk or act of he lqfrastructurr elements. funerlons as tell us

2.; nqplctc sq icr or tic BS.VL %hall ranq ‘air Tnalnicn’uvv upqnvle M qf va a inc ui n • lur•, g ar rc quzfl’(I rit1vri tI’r nllntreJ r- jrt O11U’Yl It i44 pla ‘it ia-cl r’ I . a Ct scicr . .. ij n I J;! 3* fl’1’’( ;.s.,r f(i vrs: 114 utilities bills and staflztoqj payments In tune. siacdl be the Infrastructure Providers account. The Infrastructure Provider shall ensure qood housekeeping of Its authorized representative shall have 24 hours 365 days access to the site. site and BSNL or

2.9

2.10 The Infrastructure Provider necessary skilled manpower at the cluster administer operation The maintenance. organization detailing the fault monitoring arrangement clearly oulsourced resources shall be macfe available to BSNL. employees showing 2 11 The Jrrastructure Provider nrzstnwt/prnnitdc the Envy r for aiahlinq ‘mcI Microwave BSNL to install Cellular antenna of required cite ‘mc! quantity. nsers itch bc jr ozdtd ‘Ith uft.zblc la4der lot I zc iitaunci BSVI, ,o inctrz I “tic! a HF ‘viblrs cdorzi Lowert. up ru shelter. !hc l’he ucproiv, loruiqfcc houtdinc icR ua1iqo .ini (a 11% It r .iet.’r .“ul ,o., ‘,i c,Sit flt,j7)J•.ft •fl flj’ LVT I ) 1(Z .4 bE r’ ‘I C. 11 115 antennae and Microwave antennae each of 0.6 meter diameter and 1.2 meter diameter rates mail be quoted separately.

2. 12 The Infrastructure Provider will maintain fuel levels in DC sets and maintain DC in working condition.

2. 13 [P shall provide fioorspace Jr installation yf telecom equipment to the BSNL.

2. 1 4The Infrastructure Provider shall provide space on rooftop/ground based tower enabling BSNL to put GSAI and Microwave antenna,

3.0 BUILD, OPERATE AND MAIN1AIN TELECOM SITES Ii is cs sumned that while acquiring and constructing new sites the Infrastn.tcture Provider shall be responsible [or: a.) hI Right of way Agreement with tILe Icindlrds TbthnixA & en.vtron meata) suit.abtiity, including availability of SEE pou.’er si f1iciertt connected load. ,io ciisturbance from nteiqhborhood etc., 116 40 317E DLVELOPMEArI PROCESS SHALL BE AS FOLLOWS a) In case of a new Site + BSNI provide Infrastructure Provider with a list f towns (in order of priority)for potential coverage. + Irifrastructw-e Provider will conduct their field surveys and revert to BSNL within 10 working days with the nominals of the proposed sites •: BSNL will revert Infrastructure Provider with a confirmation on the nominals within 3 working days of receiving the nominals, + Infrastructure Provider u’ill qive report ready to be handed over BSNI within a stipulated number of days (from thc datr of confirmation of nominals) All RIT ‘tie 0 daqc All OF I site , dcii • i “cithj k c 13 A. epuc i re cu e bij BSNI PM Ii LIJO x e I Ia ‘S 117 3 working days Provider. Infrastructure b) In case of an existing Site existing fj’ Ws Infrastructure Provider, It will be offered In lOdays

5.0 POWER PLAN1’ (NOT APPLICABLE iN CASE OF OLT1DOOR DES) IPL shall provide SAWS power plant with weather proof enclosure (IP-55) of appropriate capacity with spare modules.

6.0 BAT1ERY SET (NOT APPLICABLE iN CASE OF OUTDOOR DES) IPL shall provide 2 sets of Maintenance- free Batteries of appropriate capacity with a power backup of 6-8 hours.

7.0 POWER REQUIREMEM’ ) II’ shall be provide AC-Mains/DG Supply as per SM. ) The Infrastructure Provider shall provide 2 nos 50 Amps DC MCD for connecting the HiS along LOith the Power Plant 118 Lip to 4 rios iöAinps MCBs lbr Radio eqwprnenls AC power Jrorn SEB grid. with suitable connected Load at ACDB. Power hack up from a Diesel Generator qf suitable capacity. Neulrai to Earth voltage should he less than 2 volts ‘ Class B & C surge Protection. should be provtded in the Power lines in parallel for non lightening prone areas, However in lightening prone areas, surge Jilter should be provided in power line hJre entering into shelter.

8.0 AIR CONDITIONING (IN CASE OF INDOOR 13Th) Room Temperature 2:5±/2 deg C • Sensible cooling capacitg oJ A/C. Above 90% Relative Humidity 40 to 85% Rech mdancy should be avcrilcthic Jbr tar A/C awLs Condertsati.on and hot spots should not be generated inside the Sheltcr/Room. Major fault resolution time: jOt 1ft uttUiH (ILl hrnis 2 hrs L 119

() EAI?TI lL\( S STEM Eurthing system with multiple eartli pits. Which eon jinTi to iiidiwi Si0i1(lurd IS: 3043: 198? arid IEEE: 11(N): 1999. It should con irm to 101100 ‘ing. The earth reszstwwe t’alue should be less thaii 05 ohmS. Internal Earth Distributor Bar (IEI)13) iiiade of electrolytic grade copper u’ith 24 holes l mis management thu. (staggered) to be prot’ided inside i/ic shelter. The IEDI3 should be directhj connected to an earth pit. The direct connection should be using 35 sqrnin ( u ablc and th conrte 1d urtlz pit should be a Cu Plate Earth Ptt Evt run! nrth 1)istrth7ltlnn Rur IWDB ame as that tear o are qutdc f IEDB shall he rr indt d it nj plait 3U side te sleltu o jro din J he RE t a arm r a founts and tC I I 0 s f 120 Equhpotential bonding: All earth pits should be inteaconnected at ground level. All metallic paris as site and also in the vicinity (i.e, with in 5 meters of zncludzng fencing) should connected to site earthincj, External and internal interconnected at joints arid eartheci at ends. > Earth pits: All earth pits shall confirm to 18:3043:1987, All Earth pits should give an earth resistance less than 05 ohms. required enhancement compound may he used to get requtred earth resistance.

10.0 LIGHTENING PROTECTION Lightening arrester provider on the tower shall be connected to the earth pits using dowic conductor. Down. conctuctor should qo directly to the earth-pu rind it should also he connected to the (Owed b0C1U at the base Oj the tcwer. The down cond..uctor should be 35 sqmm. Cu cable, and. to be routed through the tower leg au:ay from the cable ladder. In areas which experience heavy lightning, 121 active/specialized light ning protection based on advanced technologies riced to be provided. The iou’er legs should he earthed with an earth ring. ILO FIREALW,TEM The Fire Alarm system should have following fratures: A digital ten iperature sensor with seLlable temperature independent of air conditioner alarms shall be provided Potential free contacts of the below mentioned alarms shall be wired to the termination through shields/armoured cabic Irifrastruc tuft Provider for fault managc merit. ntrc mny usc snmc nthrms Input poucr au Trrc Sy Icr [cut 122 Independently checked and ccriffled by Institutes like SERC. + rower material sourcing faL rt.catIon, and erection shall be dont’ as per relerant IS (‘odes and standard detailing practices. • Tower erection shall be done as per accepted Industry practices. Foundation base assembly shall be leveled within tolerance given in IS-5613. All bolts shall be properly tightened to wrrect torque There shall be any open holes and bend members in tower. • Tower shall be complete with all accessories like Antennae mounts. Access ladder. Cable ladder. resting platforms. twrklng platfonns, l(ghtenlng arrester, and Aviation lamp as per 1(140 rules, Vertical and Flonzontcd cablc trays and carthinq arrangement Antenna mounts per Customers loading require nwnts should ne provided on rhe cower as çjii c’rL a’ (xSM A ucnna 3(XOrnn. taint “6mm ha ‘C bi 1111’44ntrnna mourn I4llIflL 111(1 V 2000nwn Iowcr It *11 Ix paitisl a. )cr ( jj) J, 4 I ‘ Ii a’ s I ‘i a r r n,.p : i. •i.o• abs ‘ it iLa S’3 4 A 1. ‘p 1c’ •‘. 123 shall be adhered to when antennas of dUferent operators are loaded on the same tower

13.0 SITE Jrp15TRrCflrRE OPERATION AND IA INTENANCE SERV1CES •:• Iii fras tructure provider will deplol] Field Maintenance teams in each cluster of sites, to monitor health of sites •• Infrastructure provider will carry out housekeeping on daily basis for keeping site clean + Infrastructure provider will regularly procure diesel on behalf of the Customer for jilling up in the DG sets provided hij the Infrastructure provider •:• Infrastnicwre provider will maintain logbook of fuel consumption 1/ic Customer actual consuipption basis as per schedule 3 • Infrastructure provider will keep the passive Telecom Infrastructure n operating condition •: infrastructure provider rvii get tfrastructure serviced through periodic routine main Lenarice. On rerorl at tautt br aru1 01 passive equipment and ir}ctstrucntre. lab rastructure provider lechnlcat/enyincer will nisit the sue itLrin arced timelines, attend to the problem artd set ripht. 124 + Infrastructure provider will also ensure marutfacturcrs infrastructure Telecom passive support maintenance, throuqh Annual Maintenance Contracts + Infrastructure provider will provide for extension yf all the infrastructure alarms on a alarm panel enabltng customer to extend these alarms to their system.

14.0 ELECTRICITY BOARD SUPPLY fEB SUPPLY) Infrastructure provider shall be responsible for providing the electrici4j board connection qf the required rating at the site, However, f the site is ready in all respects including DC set and if the EB connection is not available then I3SNL at its own discretion can start its operations on the site, Fill such time RB connection is not aiaifrihl cite shall un on DC And th expenses for the DC shall he born by thf lIMIt as detailed in Schedule 3 I 0 RPALti FOR INSI4II IOI RI I Nhtk thi afras r I r pra de ck cia t’ adu, ILs1lcuc ZII hSi h utc ar ii hi u z rn I c luupment lb Ii II ISA P1 125 Shelter/I jurpnlent room is fully ready and (ill dcbns arc’ cleared o/j to move the ecjuijmzcllt. + Electrical wiring completed, energized and tested. Air condit loner comm m miss lvii cd, tes ted and operational + Tower erection, Earthing. t ertical and horizom ital cable tray complete. Pat, 1 tim my comp (etc (if not complete. BSNL and Intrastruct nrc Provider can take a mutually agreed decision on a case by case basis) + 1)0 set with Acoustic enclosure installed, tested Jor Sound suppression, Vibration elimination arid operational in all respects. Sound suppression is as per CPCR riornis. + SEB power available (Irid extended to cqurpm t om (iJ iot available, I3SAL and the I,t/}izstmucnmrc provider can rake a rnittmutlly uqrcea dectsiort on a case bti case hast’’ Final iipt rta I JT1rfls(r1fi,1c vro mdc, 11)1 ltltntt4Illcrl,r i-qztip!Tmenl n ‘r ii md Eart It’1i cntjilcwd and j on i ailabic Jot LISJV audit I ic i Oitj COt (I S riaJ t L t(i TC I)itif Rfnro H 126

16.0 RfT OF INFT?ASTRL’CIVRE PROVIDERS EXISTLVG SITE if I3SXL iclentijies an existing site oJ l,ifrastructure providerfor their BTS installation and the infrastructure V its being offered for sharing, Provider need to arrange for all the necessary up gradation of existing iijfrastructure to make it BS1%Vs standard suitable for BSNL equipirrnt requirement remains same as listed above, however based on the site conditions and availability of the site specific requirement can be resources. mod(fled on a case by case basis.

17.0 GENERAL POINES 1 1 equipnrnl 1 The hjJiasrruewre Provider shall ensurc that as i manutuciures ‘itipitiwed quidelincs wad all follow sqJr he teams vorking 4 the InstallatInn tic, nstollation i r.zctzcc s jii.n’id€r Flit uteri. n,n,trrird.pz ibh,r’ipi u” ttc propcrtzj wid ic’.pcanszble far s(#e’tL, ol zrjJrastructun IL’oUld lit Ii c ptvpk. 51 1 Icttc 1 C HI H or pUn zltst t mr Jn’c c , •:, ir)I!. ..i’ ‘r’ r, ,,). r q.7’.

1.’, e’” L’ I 127 lecirical insl ciorate ‘k’arances etc. uric! all reIced paijmeti(s. .1 7,3 Iifrastructure provider shall he responsible for complaince ot all labour eiiactmerzts, such (IS provideiit hind. rninimunt wages act. workrneii cofllpcnSdnion rid. coal rcidt act, gratuity and £51 niles of workmen and their pcujment to workers and respective (jovernlnent agei icies. I 8.0 DOCUMENTATION Infrastructure Provider shall submit one set of tollowinrj documents u Cnsioiiie, along with site RFI cleclai ation/hand over: Site access plan, showing and route map and visible idea flficaaoii iitzi*s ciiicl c0711(Wi deraistor reczvlina the’ site lxatton of lower S11 11 r wid DC in a layou plan Lith as built r ieacurr m itt. of Earih vus & Larthmu oruliicior inijout plan of S c hr Ut td (zitr er WC13. pu , , T& tark . EFI )B f,oas ! 1 ‘ 1Lsi)fiie1 nctri e’l ci f EDl !(i LiiiL t - I I 128 List ol equipment. capricitil. serial numbers. Jut ms mid mire Provider imam’. Se’rvicc eriqineers oritact telephone r iurnber SERX 1CE LEVEL_AGREE IENT This Service Level Acjreernent (SLA) /br Round the Clock Operation rind Mctinremicmce of Passive irtfrasinieture jbrrninq infrastructure sharing agreement dated

1.0 SCOPE OF WORK The intrcLstructure Provider shall provide tin’ tOlloiving sen ‘ices: 1 . Supervision. Operator rind control of the Services relating to passi c zntmstructurc equipments as per schedule 1 including their mnaintenancc sen’icc supen’iszon lepairs Ic at the specified ‘ Carry on’ perzocim( s n ‘icinqi over/n imilmy Diesel Generaior setc brised ‘n tHrii 111 )q,,)y ctSUftt flOIi/,L1 L (}SlS. Siiji oue’nd n c,)j (III ‘‘c Inros Udi0’’ 129 5 Shall ensure that minimum level oj diesel in the lank oJ 1)6 sets is maintained a 25° capacity yf tank

6. Shall endeavour to maintain the temperature inside the shelter at the level of 25+! 2 deg C,(This clause is not applicable in case of Outdoor BTS site1 7, Shall render monthly reports to BSNL specfying consumption of Fuel and Electricity in a format to be mutually agreed between the parties.

8. Shall render mDnthly Fault Analysis Report BSNL in format to be mutually agreed between the parties. 9 Shall ensure that all the items/equipments warranty handled! attended by authorized dealers only. I h responsihihtu ot cosuniria the availability ot hc sparc parts tic in. md that lhc ahovc inc ittE nded by thc authonzi d dcalcr sbtll bc hat f InJrastrm Ii rc. prot idcn ta p ndc c i. 11 1w 130 11 In the ci’cizi of aiitj dctcL71tiiur ci passic intrisiruciure’ cii (VU] ot the sues, BSNL shall report the’ SWJIC to the rtomincift’d re’presentatwe of Irifrastruc(u re provider throng! i SMS, followed by cm email. It is agreed between the parties Infrastructure Provider shall attend all critical alarms which can lead to outage, within a maximum lime 2.5 hrs plus traveling tirrie of maximum 2 hrs br remote sites between 6 AM and 10P]I amid wiiliiii 3.5 his pius traveling time of maxirmium 2 his for remote sites between 10 PM and 6AM. from the rinie ol receipt qf intimation of such deject by the Infrastructure prot’iders noiTuncired representative. In case there arc niore than one alarm at any sites) falling under same technictan, then the pnonttes to attend the same shall b decided by th BSVI vhosc decision a iii hr final rind buidmg ri this respc Ihe outage shall be air Paled jrnrrm lIe lviii Is cjviteraie’d tip the lirlic wheii IX is a st’;red Oil the inrcisrnL nile F70L d” 1111 rcislnc1un’ I’rnl’lcler In r’nszire a’amkthziir ;f (iliv (tlels cit ira ‘‘itn, In m’iivs 131 message rtvelreci by irzfrastrurture I’rovicler’s filed engineer. This will he ensured Jhr 99.90”. availability.

Iqfrastnzcture Provider Suipe and l(qhIL’ning protection at the input ofAC znztvr supply. is. lqfrastructure Provider to provide 3 phase Eli 50 lIz line voltage 2401 480V (Line to line) and 140 iro 280 V (Line to neutral)

16. lqfrastnzcture Provider to provide Dust free and shelter room. Also periodic Rodent/Pesticide control has to be undertaken by Infrastructure Provider.

iqfrastnwture Provider to encurc Leakage free Shelter room.

lqfrastructurc Provider t provzdc quality antistatlc flooring 1? lnfrastntctnrE Provid.c r c n.sun Farth esLstanVLE not rrort than 0 3 Iim uncic iormal otlcondlti.on 4ycarly heck .nthc alueof Earth TesLstan c ic bc condw Lcd ml recessary action be aPt er unc.kr iv I 1 thc knowledgc 20 lrgrastruc ture Vn tnck IAlifl$JUL’Iki% (kIt t p • .e c k ‘nt ;hei, r liii,,. s ; E r ito i ovidc uztcsbIc Fire t nd.crj u lift porlndr S 132

21. Injrastructurc Provider to provide Aviation Light & Liqhrcrziny Aries br In z th separate Earl hiny)

22. All electric a! equipriicrz t sac! as Microi cave, Antennas, Cables. PItT, BTS, TRX ivill installed by Cellular Operator and do no fall within the scope of this agreement.

2.0 AIJT)ITIONAL RESPONSIBILITIES OF INFRASTRUCTURE PROVIDER

1. Infrastructure Provtder shall he responsible ftr security, maintenance, operation infrcisi ructure as Sets (including replacements of DGs or air conditioners on their end of liJeJ. 2 InfrastructurE Provider shall ensure that Iderzti[Ied Assets (Room/Shelter. Air Coiiclitionei. DC. Electrical XViring. Conine rein! Poweri arc ma in tamed in good a ‘ )rloi iq condition. :3 Injrasrntture Provider s tall be flu single point 01 nlcu t a ith the ttc frzrtdloid (lid ill othe local zuth; urities (LIZ IUh1I1Ip(J1 Lk(tTLcItj I3ocnd ilniverer B5\L tohi he res1jnTisavic br ohiairunq S X(E’ clcczrczitc J i Ficqne’n j us oiilij. I I taking the concurrence from the officer of at least JAG level of BS\L.

5. lit case of failure in the site, Ilie lnfrcislrucnirc Provider shall iiltiniale the nominated person 0/ I3SNL thru SMS. In case failure extends beyond 30 minutes, the failure is escalated to the C’FO of the Infrastructure Provider &, BSNL. Once (lie /czilure is resolved, intinlatiori 10 he conr’etjed thru SMS by the infrastructure Provider to BSNL. For critical failures, Root Cause Analysts to be conducted arid shared htj Infrastructure Provider.

6. Placement of GSM/MW Antenna mittuallij agreed heights between Irijrus tract i ire Provider & BS]VL. 7 lrfrastructurc Provider r nsui e Pcrssii ‘e Pelecoiizrnun iccit ion ins tczllation shall not become a sdzlel hazard and shall nom be in orntrat’cniuni of nrc] sunlute. rule nr rc(luiation i. id publt p011(1 tli’t ci -1 thy OjriVs i 134 permitted 1i applicable laws in India arid subject to the ternis arid con(lition’— ol I his areeinent. As is clear from tire aforesaid words. is an agretinerll to share equipment and such sharing is by way oF perrnissioir and not by ay of transfer. What passix e infrastrutur active infrastructure is defined in the Master Areemeiit. Passive infrastructure means, at any site. any infrastructure located at such site which is perniitted by Law to be shared by the Parties including but not limited to the tower, shelter, diesel generator sets, air conditioners and electrical and civil works. At the site, the service provider will erect a tower. In order to operate and maintain the tower, lie needs diesel generator sets. an onditionrs arid eletrical equipment. All these have to be in a room uhi h is tailed a shelter. The at tive miratr ret ut inrludes base termiirtl Niation F’quipmeiil. irJuIiIat’. hackinu rI e’nnt I i\ ii\ lie hjrin br’s t h and h i r qir’s equipri 1 at C t (Ohm In I on st I V r i Pu i Jp’lat a ,iilij [; ‘- i. 0 135 means, that the sharing operator mounts his antennae on the tower which is a part of passive infrastructure. To operate that antennae at the base. he keeps his equipment and by operating those equipment, he provides telecommunication services to their clients.

Working telecommunication network, involves the process of receiving, amplifying and transmitting the signals. As Indicated supra the set of instruments dealing with the above process Is termed as ‘active Infrastructure’ belonging to the mobile operators. For functioning of the active Infrastructure maintenance of a particular temperature, humidity, safety and also positioning of the Radio/MW antennae at a particular height Is required. These requirements are achieved by using the passive infrastructure, I.e.. tower and other equipments. The mobile operators are permitted to mount their Radio/MW antennae at desired heights and direction coupled with the use of equipments providing other technical requirements. By using this passive Infrastructure, the mobile operators communicate the mobile I—-- 136 signaLs. ‘this right of u’e is acquired legally by means of contract called enice contract read with MSA.

51. What assessee provides in the passive infrastiucture to the mobile operator is the power connection to the mobile operator. The power rating of the Sharing Operator’s equipment of a Site 1ll be detennined on the basis of measurement of the aetual consumption by the installed equipment on a full load basis. ‘this meaqurement will be conducted whenever new equipment is installed by the Sharing Operaior on the Site. A detailed measurement process shall be agreed between the pat ties the pociei eonneetlon at a Sitc shall be providc d in accordance with the following ai lX pou’er (u 4% “airs, or .4C power at 200 rails. ‘m required. Few the anndnr, re ‘4 dsubr. f Shat )perc r sh’d’ I pons’bk x “C ‘.Sflfl. ‘01 ‘a, J’i’) .‘.d) .1) il’l’ 1k 11( Rs I..” ‘n” u’u’v? I’I’-’n’j 4 t L 137 Ic) Up to two (21 16 Imp %IC’Bs lot Radio equiprrrnt 52 Space for a maximum of I. single tadios in the case of GBT and 3 single radios for RYE’ in a l9•inch rack shall be provided by Indus to the Sharing Operator to support tile above standard configuration on a shared basis at each Site. 53 ‘flits is the service rendered by the assesee through passive infrastructure to the mobile operator operate as active infrastructure.

Clause 2 deals itli Site access. 3 careful reading )f the atoresaid nro, ision make’ it clear that whit a sc, & is expected I. provide the mobile )perator is Siu. at c ½ n ailabih y the Shann )perutor cordancc .rtt hr tn Ins and ‘ oudni’ 1l i’t tin’., agt eiii in - TiLler the tt’Tfli% i the aweellwnt. tlc a%CsCt %hail • iNure that sac-li ‘-4te l sap is. ci a’rtri odati.’t Sinnt Opeidt cqutj)rncrr a and’ -I lid4 (I he’ 138 Operalor to keep hi equipments i.e.. the permission to keup his eqiiipinei1t in the shelter, provided by 11w assessee On execution ol the service contract, the Sharin Operator shall have the right to install the Sharing Operator’s equipment or any portion thereof at such Site. The Sharing Operator shall have access to each such site for all installation activities and the assessee shall provide to the Sharing Operator necessary means of access for the purpose of ingress and egress of each site in accordance with the terms of the service contract In other words, possession of the site is riot handed over to tire mobile operator Mobile operator is permitted to keep his installations in the properly belougint to I ht assessee of vltich he is in p ‘s’ission Flie 2ivefl to the rnnhtI operato r isn1u to 1nres and etr’ss ihai too for the purpose (II OD0(0iiIi his ocix e iiirastrictut ‘. Fufl her ii i made 0iCr l rigress ar d i. ot ax aiiai]c 10 ail lnuio\ 1 t lit ninbili ontral’ r.

Therefote. it Is clear that not only no portion of the rnfrasthuiiirr 1 translerred to the ntnhlk ‘peiatnr alter providing arc css to the mobik ptrator to ba Ix use of the pa ne mlrastr ti c the as c. u ha- rctaired thc right It a—c liven’. rift lis%it I’ilic1rUt titre 0 dfl :idvt rtisIni ageii. 1 ht i nli linutal ion hnnuj Thai %1 u Ii adveni%int a t ‘,lioi Id iint h’nde (lit ‘iwit ‘ the isiuhik )er itor tO i C Pt’ c iii’ It 141 56 Scheduk 2 to tilt contract deals ‘R ith opt ration and maintenance services. Ipart from other things mentioned in the Schedule, the operation and maintenance services to be provided by the ascessee in respect of each Site shall include general upkeep of tower and site premises including ensuring that the Sharing Operator has space to access its cables laid in the cable trays at all times: the Sharing Operator has space to access its antennae at all times; mountings are kept tight and rnst free and tower bolts are tight as per torque requirements This is in so far as tower lh concerned. In so far as power supply is concerned. the assessee has to ensure power supply to the Site in accordance wit Ii paragraph 1 of Schedule I at all times inc luding (lass H and Siirqc Pmtec lion In the pnwc r mes at Sites vherc kC po cr is proi Med The issc ssee is bhgatiois to n imtain canbirç system auth rni’tarir • abie ‘‘I le.’ than 2 ohm— Interiiaj e€utli (llstrlJuticn b.u ot °‘leniolviir craLk opper ‘nih 23 hub IA Snir liancter t be p’c” idcd in%ide tl %hCltcr dir et S

1. lilY I I ‘qdl I) 142 copper plate earth pit. Exttrnal earth distribution bat, In accordance ivlt Ii above, shall he provided near to the wave guide enu plate outside the shelter for grounding of the HF cables and equi potential bonding of all earth pits should be inter-connected at ground level. External and Internal cable trays shall be Interconnected at joints and earthed at ends. In addition to the aforesaid services the assessee is also liable to provide periodic stability checks of the tower: timely payment of electricity bills, as applicable: provision of fuel and filling the same In l)G set at the Site d% required. maintenance of DO set. security services, provision and maintenance conditioning as a out below. I.e (a) Roon. temperature I hc maintained at 35 ..: degrc s Ccn; igiade meas ILd on top of the 3 S ‘3 c c ci dl 143 Ic) In o far as niaintenaiu. e of fire alarm s stem is concerned. in cac ot an outdoor BTS a covered plinth of suitable dimensions: provision of a cable tray inside the shelter: provision of space around i he BTS br maiiii eriance: and anlistal ic 11oorini and proper earthing; provision and maintenance of fire alarm system are all to be made available by the assessee.

(d) The assessee is also liable to provide lightning protection as e1 ou in the schedule. 57 This s the lacililv winch the assessee provides to a mobile opei ator the nsive tnfraslruuture Consists Ci he following. u )OlOS - jsU IV IV tub! ft c r ( a E )I e p w (lii Il 144 4) 5) 6) 7) 81 stabilizers, Seno conditioning equipments. static stabilizers, Power Managc’mrnl system Air Conditioners. Electrical Panel ElectrIcal DCDI3. ACDB. lights, switches, sockets. cables. clamps. 9) Servers Racks. 10) Cables & Wires. 11) 12) 13) 14) Switch Gear. FraruJormer Surqe protection system Lighting protection systc m. 151 Cable cniry panel. 6) 11 t) FIre Alas in System. FUc F’llng as& s prot LI ‘n 4k T l*utrry Bank. I WI’ ctiJter 201 ‘lriatl. “ Lranp. 1 C k’ a 1: •‘% .lt,,rr, t’” i V 145 Flooring! Ceiling panel. encrciij J\onconrentiorz.al system windmill power generation systems, Fuel Cell. Free Cooling Unit & Possü’e cooling Material, sources-Solar 23) 24) 25) All lBS related iitfra-RF cables.

Distributed Antennae system, repeaters, ampltfters. splitters. etc,. 26) All Machinery equipment, parts. spares. components. items for use in telecommunication network or in accessories, consumables & other generation or distribution of electricity. 27) high speed diesel & Lubricant oilfrr use in DO set, 28) Acoustic Material. 29) 30) All types of Trans mission cables, All other goods Jdr use in the telecommunication j’ electricity or network/generation or dfs trthution. ann other trm of i3orce. 31) Spare parts, accessories and components of goods mentioned above. ‘Fin entire i nlrastructure/ ft trnments/ appliances and. e..xchantic ai.’e in the phvsiccd control and possession of die ass essee/seivice provider at.. all. times ant. there is neither any I 136 physical 1 ran-Iei ol such 4oods nor ari I ransier Of flhI to use sm h equipirierit or apparatus

The assessini alrthoriI\’ scents to be tinder the impression that under the terms of the eontracr there is a transfer of to use the aforesaid equipments which constitute the passive infrastructure. The sharing operalor has rio use for any of those equipments individually Fhat is the network which the assessee utilises in setting up a passive infrastructure. What the mobile operator wants front assessee is permission to install their antennae in the tower erented by the assessec unini em ipted supply of dcc trical cnerv ji a parn” u1ar lemporati re permission to kee 1 lie tu nifrastru ‘ture in the pre ibneated he1tcr ifir of irii es” aud &‘rec to ici ate !H5 ei upitleni ‘c’ that In i ttihI- lit’- Ji in iairasiruoi -:e br 1eudr 1it SOfVR’P ; (. II ‘-1 I ( ‘-• “t in li a nt i1ira’ iH1 10 10 S1t afl(I Ii a ‘-c - ons’ bull ti tO 147 temperature and to mount the antennac on the network at a pail Icular height.

4.. ‘1r 149

‘LIcence defined”. Wizen one person grants to another or to a definite number QJ others persons, a right to tic or continue to do. in or upon the inrnzoz’able property of the grwzroi. something in the absence of such right. be which would. unlctwlid. and cuch right does not amount easement or an interest In the property. the right is to an called a licence. 61 A licence Is a grant of authority to do a particular thing. It enables a person to do lawfully what he could not otherwise lawfully do It transfers an Interest to a limited extent. A licence does not. In law. confer a right. Ii only paunts that act front being unlawful hich bitt iccncc ‘wuld b unlacUul 4 hcc’ c give r note bar The nght o do the thing actually h ‘en cd ta be don arena ny 1k t ‘uit1’4i or :“u eXt 1iz’i’ r . nun e-xrlusnr ncrncr i’. 4rant of iutl, oiitv ‘ tic, a paitvular tliini ‘nil no zich’ ‘)i c lu’,ion iiiaat%t’. ‘e r. It nt-ic i ‘“ntr’s hi ltt f. an initi’ ;i; i p Ii inc. a to lo eli he C, .1 150 62 An exclusive licence is a leave to do a thing. awl a contract not to give leave to anybody else to do the same thing It confers no interest, or property in the thing but only makes an action lawful. which. without it. would have been unlawful. A licence is a pennis!4ou to do something that would otherwise be unlawful.

The right contèrred by the assessec on the mobile operator is in the nature of a personal right granted to him to do something upon the passive infrastructure belonging to thc assessee It does not amount to creation of an Interest m flit passive inliastructure itself It is pureli penms’ae iieht and is per’nnal to the erantee The licence has no other effect than to innici a iibeit ipoti thc 1 cen’—ee to upwi ti land ‘ili ‘Ii 1 v 1 0 amg. s_i i.e ‘ 11w i an t’t cnaa a—1L’rpLbIaT’.. a on ;lw •rrn1 tidt Dr.)l’nt% ior :LLL SIIIILDIL I. 111% I It. ,. . ni, •—. I f •. .4, ‘4 z I. ‘I 151 licensee. thc tic ant c. is atwas trcatcd to lx in pennissive po%sescion I-Ic is ulven only am authority to enter into the premises. The possession is always with the hi ensor. Oub entry in the premises jq made legal It does 1101 create any title in tavour cit the license. A licence is a mere s,rani of a twrsonal privilege to do something upon. without conferring an estate In the land. if a document gives only a right to use a property in a particular way under certain terms whIle ft remains In the possession and control of the owner thereof. it will be a licence.