IN THE SUPREME COURT OF BANGLADESH APPELLATE DIVISION

PRESENT:

Mr. Justice Hasan Foez Siddique

  -Chief Justice Mr. Justice Md. Nuruzzaman Mr. Justice Obaidul Hassan  

Mr. Justice Borhanuddin

Mr. Justice M. Enayetur Rahim

CIVIL APPEAL NOS.135-137 OF 2012 AND 443 OF 2016 WITH

CIVIL PETITION FOR LEAVE TO APPEAL NOS.1386, 1936 & 1128 OF 2012, 377 OF 2013 AND 1637 OF 2014.

(From the judgment and orders dated 13.02.2012, 13.05.2012, 14.08.2012 and 20.04.2014 passed by the High Court Division in Writ Petition Nos.8904 of 2011, 157 of 2012, 9263 of 2011 and 14864 of 2012 respectively).

Grameenphone Ltd., represented by its:.....Appellant. Deputy General Manager Mr. Md. Abdul Hannan.  (In C.A. No.135 of 2012)

National Board of Revenue (NBR), :.....Appellant. represented by its Chairman, Revenue  (In C.A. No.136 of 2012) Building, Segunbagicha, Dhaka.

Bangladesh Telecommunication Regulatory :.....Appellant. Commission (BTRC), represented by its  (In C.A. No.137 of 2012) Chairman, IEB Bhaban, Ramna, Dhaka-1000.

Government of Bangladesh, represented by :....Appellants. the Secretary, Ministry of Finance,  (In C.A. No.443 of 2016) Internal Resources Division, Bangladesh

Secretariat, Ramna, Dhaka and others.

Md. Shafiqul Karim and others. :...Petitioners. (In C.P. No.1128 of 2012)

Orascom Telecom Bangladesh Limited. :....Petitioner.

(In C.P. No.377 of 2013)

Banglalink Digital Communications Limited.  :....Petitioner. (In C.P. No.1637 of 2014)

Axiata (Bangladesh) Ltd. @ Robi Axiata Ltd. :....Petitioner.

(In C.P. No.1936 of 2012)

Telenor Mobile Communications As, represented by :....Petitioner. Per Erik Hylland, Bangladesh Country Manager.  (In C.P. No.1386 of 2012)

-Versus-

Bangladesh  Telecommunication  Regulatory : ....Respondents. Commission, represented by its Chairman,  (In C.A. No.135/12, C.P.

IEB Bhaban, Ramna, Dhaka-1000 and others.  Nos.1128/12,377/13,1386/2012)

Grameenphone Ltd., represented by its : ....Respondents. Deputy General Manager Mr. Md. Abdul  (In C.A. Nos.136-137/12) Hannan and others.

Axiata (Bangladesh) Ltd. @ Robi Axiata: ....Respondents. Ltd. and another.  (In C.A. No.443 of 2016,

C.P. No.1936 of 2012)

Government of Bangladesh, represented by : ....Respondents. the  Secretary,  Ministry  of  Finance, (In C.P. No.1637/2014,1936/2012) Internal Resources  Division,  Bangladesh

Secretariat, Ramna, Dhaka and others.

For the Appellant.  :Mr.  Mustafizur  Rahman  Khan, (C.A. No.135 of 2012)  Advocate instructed by Mr. Mvi. Md.

Wahidullah, Advocate-on-Record.

For the Appellant.  :Mr.  Sk.  Md.  Morshed,  Additional (C.A. No.136 of 2012)  Attorney  General  (with  Mr.

Samarandra  Nath  Biswas,  Deputy Attorney General, Ms. Tahmina Polly Assistant  Attorney  General,  Ms. Farzana  Rahman  Shampa,  Assistant Attorney General, Mr. Md. Humayun Kabir, Assistant Attorney General, Mr. Mohammad Saiful Alam, Assistant Attorney  General  and  Mr.  Sayem Mohammad Murad, Assistant Attorney General,  Ms.  Tamanna  Ferdous, Assistant  Attorney  General) instructed  by  Mr.  Haridas  Paul, Advocate-on-Record.

For the Appellant.  :Mr.  Khandaker  Reza-E-Raquib, (C.A. No.137 of 2012)  Advocate  (with  Reja-E-Rabbi

Khandoker, Advocate) instructed by  Mr.  Md.  Zahirul  Islam, Advocate-on-Record.

For the Appellant.  :Mr.  A.  M.  Amin  Uddin,  Attorney (C.A. No.443 of 2016)  General (with Mr. Sk. Md. Morshed,

Additional Attorney General, with Mr. Samarandra Nath Biswas, Deputy Attorney  General,  Ms.  Tahmina Polly, Assistant Attorney General, Ms. Farzana Rahman Shampa, Assistant Attorney General, Mr. Md. Humayun Kabir, Assistant Attorney General, Mr. Mohammad Saiful Alam, Assistant Attorney General, Mr. Sayem Mohammad Murad, Assistant Attorney General and Ms. Tamanna Ferdous, Assistant Attorney General) instructed by Mr. Haridas Paul, Advocate-on-Record.

For the Petitioner.

(C.P. No.1128 of 2012)

For the Petitioners.

(C.P. No.377 of 2013 & 1637 of 2014)

For the Petitioner.

(C.P. No.1936 of 2012)

For the Petitioner.

(C.P. No.1386 of 2012)

For Respondent No.1.

(C.A. No.135 of 2012)

For Respondent No.7.

(C.A. No.135 of 2012)

:Mr. A. F. Hassan Ariff, Senior

Advocate instructed by Mr. Syed Mahbubar Rahman, Advocate-on- Record.

:Mr. Md. Asaduzzaman, Advocate

instructed by Mr. Syed Mahbubar Rahman, Advocate-on-Record.

:Mr. Tanjib-ul Alam, Senior

Advocate instructed by Mr. Bivash Chandra Biswas, Advocate- on-Record.

:Mr. Ramjan Ali Sikder, Advocate

instructed by Ms. Sufia Khatun, Advocate-on-Record.

:Mr. Khandaker Reza-E-Raquib,

Advocate (with Reja-E-Rabbi Khandoker, Advocate) instructed by Mr. Md. Zahirul Islam, Advocate-on-Record.

:Mr. Sk. Md. Morshed, Additional Attorney General (with Mr. Samarandra Nath Biswas, Deputy Attorney General, Ms. Tahmina Polly, Assistant Attorney General, Ms. Farzana Rahman Shampa, Assistant Attorney General, Mr. Md. Humayun Kabir, Assistant Attorney General, Mr. Mohammad Saiful Alam, Assistant Attorney General, Mr. Sayem Mohammad Murad, Assistant

Attorney General and Ms. Tamanna Ferdous,  Assistant  Attorney General)  instructed  by  Ms. Madhumalati  Chowdhury  Barua, Advocate-on-Record.

For Respondent Nos.8-9.  :Mr.  Sk.  Md.  Morshed,  Additional (C.A. No.135 of 2012)  Attorney  General,  (with  Mr.

Samarandra  Nath  Biswas,  Deputy Attorney  General,  Ms.  Tahmina Polly, Assistant Attorney General, Ms.  Farzana  Rahman  Shampa, Assistant Attorney General, Mr. Md. Humayun Kabir, Assistant Attorney General, Mr. Mohammad Saiful Alam, Assistant  Attorney  General,  Mr. Sayem  Mohammad  Murad,  Assistant Attorney General and Ms. Tamanna Ferdous,  Assistant  Attorney General) instructed by Mr. Haridas Paul, Advocate-on-Record.

For Respondent Nos.2-6.  :Not represented.

(C.A. No.135 of 2012)

For Respondent No.1.  :Mr.  Mustafizur  Rahman  Khan, (C.A. No.136 of 2012)  Advocate instructed by Mr. Mvi. Md.

Wahidullah, Advocate-on-Record.

For Respondent No.2.  :Mr.  Khandaker  Reza-E-Raquib, (C.A. No.136 of 2012)  Advocate  (with  Reja-E-Rabbi

Khandoker, Advocate) instructed by  Mr.  Md.  Zahirul  Islam, Advocate-on-Record.

For Respondent Nos.10-12. :Mr.  Syed  Mahbubar  Rahman, (C.A. No.136 of 2012)  Advocate-on-Record.

For Respondent Nos.3-9.

(C.A. No.136 of 2012)

For Respondent No.1.

(C.A. No.137 of 2012)

:Not represented.

:Mr.  Mustafizur  Rahman  Khan,

Advocate instructed by Mr. Bivash Chandra Biswas, Advocate-on-Record.

For Respondent Nos.7-9.  :Mr.  Syed  Mahbubar  Rahman, (C.A. No.137 of 2012)  Advocate-on-Record.

For Respondent Nos.2-6.  :Not represented.

(C.A. No.137 of 2012)

For Respondent No.1.  :Mr. Tanjib-ul Alam, Senior (C.A. No.443 of 2016)  Advocate instructed by Mr.

Bivash Chandra Biswas, Advocate- on-Record.

For Respondent No.2.  :Mr. Khandaker Reza-E-Raquib, (C.A. No.443 of 2016)  Advocate (with Mr. Reja-E-Rabbi

Khandoker, Advocate) instructed by Ms. Madhumalati Chowdhury Barua, Advocate-on-Record.

For Respondent No.1.  :Mr. Khandaker Reza-E-Raquib, (C.P. No.1386 of 2012)  Advocate (with Mr. Reja-E-Rabbi

Khandoker, Advocate) instructed by Mr. Md. Zahirul Islam, Advocate-on-Record.

For Respondent Nos.2-7.  :Not represented.

(C.P. No.1386 of 2012)

For Respondent Nos.1-4.  :Mr. A. M. Amin Uddin, Attorney (C.P. No.1936 of 2012)  General (with Mr. Sk. Md. Morshed,

Additional Attorney General, with Mr. Samarandra Nath Biswas, Deputy Attorney General, Ms. Tahmina Polly, Assistant Attorney General, Ms. Farzana Rahman Shampa, Assistant Attorney General, Mr. Md. Humayun Kabir, Assistant Attorney General, Mr. Mohammad Saiful Alam, Assistant Attorney General, Mr. Sayem Mohammad Murad, Assistant Attorney General and Ms. Tamanna Ferdous, Assistant Attorney General) instructed by Ms. Madhumalati Chowdhury Barua, Advocate-on-Record.

For Respondent Nos.7-8.  :Mr. Khandaker Reza-E-Raquib, (C.P. No.1936 of 2012)  Advocate (with Mr. Reja-E-Rabbi

Khandoker, Advocate) instructed by Mr. Md. Zahirul Islam, Advocate-on- Record.

For Respondent Nos.5-6.  :Not represented.

(C.P. No.1936 of 2012)

For Respondent Nos.1-2 & 4-9. :Mr. A. M. Amin Uddin, Attorney (C.P. No.1637 of 2014)  General (with Mr. Sk. Md. Morshed,

Additional Attorney General, with Mr. Samarandra  Nath  Biswas,  Deputy Attorney General, Ms. Tahmina Polly, Assistant  Attorney  General,  Ms. Farzana  Rahman  Shampa,  Assistant Attorney  General,  Mr.  Md. Humayun Kabir,  Assistant  Attorney  General, Mr. Mohammad Saiful Alam, Assistant Attorney General, Mr. Sayem Mohammad Murad, Assistant Attorney General and Ms.  Tamanna  Ferdous,  Assistant Attorney General) instructed by Mr. Haridas Paul, Advocate-on-Record.

For Respondent No.3.  :Mr.  Khandaker  Reza-E-Raquib, (C.P. No.1637 of 2014)  Advocate (with Mr. Reja-E-Rabbi

Khandoker,  Advocate)  instructed by  Ms.  Madhumalati  Chowdhury Barua, Advocate-on-Record.

For Respondent Nos.1-6.  :Mr.  Khandaker  Reza-E-Raquib, (C.P. No.377 of 2013)  Advocate  (with  Reja-E-Rabbi

Khandoker, Advocate) instructed by  Mr.  Md.  Zahirul  Islam, Advocate-on-Record.

For Respondent Nos.7-9.  :Mr.  A.  M.  Amin  Uddin,  Attorney (C.P. No.377 of 2013)  General (with Mr. Sk. Md. Morshed,

Additional Attorney General, with Mr. Samarandra  Nath  Biswas,  Deputy Attorney General, Ms. Tahmina Polly, Assistant  Attorney  General,  Ms. Farzana  Rahman  Shampa,  Assistant Attorney  General,  Mr.  Md.  Humayun Kabir,  Assistant  Attorney  General, Mr. Mohammad Saiful Alam, Assistant Attorney General, Mr. Sayem Mohammad Murad, Assistant Attorney General and Ms.  Tamanna  Ferdous,  Assistant Attorney General) instructed by Ms. Madhumalati  Chowdhury  Barua, Advocate-on-Record.

For Respondent Nos.1-6.  :Mr.  Khandaker  Reza-E-Raquib, (C.P. No.1128 of 2012)  Advocate (with Mr. Reja-E-Rabbi

Khandoker, Advocate) instructed by  Mr.  Md.  Zahirul  Islam, Advocate-on-Record.

For Respondent Nos.7-9.  :Mr. Sk. Md. Morshed, Additional (C.P. No.1128 of 2012)  Attorney General, (with Mr.

Samarandra Nath Biswas, Deputy Attorney General, Ms. Tahmina Polly, Assistant Attorney General, Ms. Farzana Rahman Shampa, Assistant Attorney General, Mr. Md. Humayun Kabir, Assistant Attorney General, Mr. Mohammad Saiful Alam, Assistant Attorney General, Mr. Sayem Mohammad Murad, Assistant Attorney General and Ms. Tamanna Ferdous, Assistant Attorney General) instructed by Ms. Madhumalati Chowdhury Barua, Advocate-on-Record.

For Respondent No.10.  :Not represented.

(C.P. No.1128 of 2012)

Date of Hearing.  :The 9th November, 2022 & 7th, 13th

and 14th December, 2022.

Date of Judgment.  :The 10th January, 2023.

J U D G M E N T

Borhanuddin,J: Since questions of law involve in all the civil appeals and civil petitions are identical and based

on similar facts as such all the appeals and petitions have been taken together for hearing and disposed of by this common judgment.

Civil Appeal Nos.135-137 of 2012 by leave are directed against the judgment and order dated 13.02.2012 passed by a Division Bench of the High Court Division in Writ Petition No.8904 of 2011 making the Rule absolute- in-part and Civil Appeal No.443 of 2016 by leave is directed against the judgment and order dated 13.05.2012 passed by another Bench of the High Court Division in Writ Petition No.157 of 2012 discharging the Rule with observation and direction.

Facts relevant for disposal of the Civil Appeal Nos.135-137 of 2012 in brief are that the petitioner Grameenphone Limited, a public limited company incorporated under the Companies Act of Bangladesh and carrying it’s business as a mobile phone operator, filed Writ Petition No.8904 of 2011 invoking Article 102 of the Constitution challenging decision of the respondent no.1 Bangladesh Telecommunication Regulatory Commission (hereinafter referred as ‘BTRC’) issued vide Memo No.BTRC/LL/Mobile/License Renewal(382)/2011-687 dated 17.10.2011 by which BTRC claimed spectrum assignment fee based on Market Competition Factor (MCF) so far it relates to already assigned spectrum fee to the petitioner in 2008 and payment of license fee and spectrum fee for new assignment without any deduction, contending interalia, that on 11.11.1996 the petitioner company was granted a licence by way of an agreement under Section 4 of the Telegraph Act, 1885 by the Government of Bangladesh, represented by the Director (Telecommunication), Ministry of Post and Telecommunication for a period of 15 years i.e. till 2011, for establishing, maintaining and operating of digital cellular mobile radio telephone network all over Bangladesh; Some amendments were brought to the said license agreement on 08.03.1999 and 29.03.2001; As a requirement under the Telegraph Act, 1885 the petitioner company had also obtained a radio station and equipment licence and radio system operating licence, both dated 28.11.1996; BTRC was formed under Bangladesh Telecommunication Regulatory Act, 2001; On 24.10.2004, the writ-respondent no.1 BTRC revalidated the licence of the petitioner company granted on 11.11.1996 with some modifications, amendments and editions; Some more amendments brought into the revalidated operator licence of the petitioner company on 16.04.2006 and 27.04.2006; The petitioner company obtained 5 MHz spectrum in 900 band in the year 1996 which were enhanced phase by phase;

Upon hearing the petitioner, a Division Bench of the High Court Division issued a Rule Nisi upon the respondents to show cause.

The BTRC contested the Rule Nisi by filing an affidavit-in-opposition and supplementary affidavit-in- opposition. The petitioner company also submitted several supplementary affidavits.

Upon hearing the parties and perusing the relevant papers/documents, a division Bench of the High Court Division made the Rule absolute-in-part vide judgment and order dated 13.02.2012 holding that:

1. The writ petition is maintainable;
2. The Rule is made absolute-in-part;
3. The impugned memo dated 17.10.2011 (Annexure-I), in so far as the application of MCF to the assignment of spectrum in 2008 is concerned, is without lawful authority. Accordingly, the petitioner Grameenphone is not required to pay the MCF for the 7.4 spectrum in 1800-MHz assigned in its favour in 2008;
4. There is no illegality in the impugned memo in so far as the issue of VAT is concerned. The Grameenphone is required to add the VAT to the demanded money (except the MCF in respect of the spectrum of 2008) and withhold it at source and then pay the same directly to the Government exchequer. However, Grameenphone will get credit for the said paid VAT from the VAT to be paid ultimately by its subscribers in accordance with law;

5. In view of above, the Grameenphone should immediately pay, if not paid already, the fees, charges and VAT to the concerned authorities in accordance with law.

Being aggrieved, the petitioner Grameenphone limited filed Civil Petition for Leave to Appeal No.508 of 2012 and writ-respondent no.8 NBR preferred Civil Petition for Leave to Appeal No.772 of 2012, writ-respondent no.1 BTRC preferred Civil Petition for Leave to Appeal No.867 of 2012 invoking Article 103 of the Constitution. Though all the civil petitions were heard together but leave was granted separately vide order dated 16.07.2012.

Consequently, above Civil Appeal Nos.135, 136, 137 of 2012 arose.

Civil Appeal No.443 of 2016 by leave is directed against the judgment and order dated 13.05.2012 passed by another Division Bench of the High Court Division in Writ Petition No.157 of 2012 discharging the Rule with observations and directions.

Facts, in brief, are that the petitioner Axiata (Bangladesh) Ltd, @ Robi Axiata Ltd, a company incorporated under the Laws of Bangladesh, limited by shares and engaged in the business as Cellular Mobile Phone Operator under license is preferred Writ Petition No.157 of 2012, contending interalia, that in course of operation, licence of the petitioner company became due for renewal in 2011; For this purpose, BTRC issued Cellular Mobile Phone Operator Regulatory and licensing Guidelines, 2011 (hereinafter stated as ‘the Guidelines, 2011) in September 2011 which was amended by a memo dated 22.09.2011 imposing payment to BTRC for license renewal fee, 5.5% of the audited gross revenue as revenue sharing, 1% of the audited annual gross revenue to BTRC’s Social Obligation Fund and license fee for use of spectrum; The petitioner applied for renewal of cellular mobile phone operator licence and the associated radio communications equipment licence on 10.10.2011, in response to which BTRC issued a “Notification of Awarding Renewed Cellular Mobile Phone Operator Licence” dated 17.10.2011 stipulating the petitioner shall pay License Renewal Fee of BDT.10 crores and Spectrum Allocation Fee of BDT.1925.87 crores as per the schedule given therein; The respondent no.2 vide memo dated 20.10.2011 interpret

Upon hearing the writ-petitioner, a Division Bench of the High Court Division issued a Rule Nisi calling upon the respondents to show cause.

The Rule Nisi was contested by the writ-respondent nos.2 and 7 by filing affidavit-in-opposition, contending interalia, that the petitioner company is liable to deposit the deducted amount of VAT at source pursuant to Section 6(4KaKa) of the Act, 1991 read with Rule 18(Uma) of the Rules, 1991; The provision of Section 6(3)(Ga) provides that the VAT is payable if, any in part or full is made even before rendering the service and there is no provision to retain the deducted amount in the account of the petitioner as such the Rule is liable to be discharged.

After hearing the parties a Division Bench of the High Court Division discharged the Rule with following observations and directions vide impugned judgment and order dated 13.05.2012:

“Given further this Court’s finding and observations both on the general scheme of the Act and the Rules and the Deduction at Source Scheme, the BTRC’s contained non- registered status for VAT purposes appears anomalous in the facts and circumstances. This Court being of the view that such situation needs immediate attention to avoid any further confusion in the implementation of the Deduction at Source Scheme in particular. It is also noted that the BTRC itself on occasion has contributed to such confusion arising by making ill-advised assertions as to its status within the VAT regime. This Court finds in this respect

that circumstances now dictate a compulsory registration of the BTRC by application of Section 15(4) of the Act. Both the NBR and the BTRC are hereby put on notice to ensure such registration by application of Section 15(4) without undue delay. Given the findings in this judgment it is directed that such registration shall be deemed to be effective from the date the BTRC notified the petitioner of award of license and payment of License Renewal Fee and Spectrum Assignment Fees without any deduction i.e. from 17.10.2011.”

 Having aggrieved, the writ-respondent as petitioners moved before this Division invoking under Article 103 of the Constitution by filing Civil Petition for Leave to Appeal No.2420 of 2012.

This Division, upon hearing the parties granted leave on the following grounds:

“I. Because, the High Court Division erred in

law in finding that the continued non- registered status of the BTRC appeared to be anomalous in the facts and circumstances inasmuch as the said observation is far from reality and based on mere surmise having no legal and material basis as NBR, Postal Department, Bangladesh Bank, City Corporation and Land Revenue Authority although engaged in realizing VAT through deduction at source bear no registration

under VAT Act, 1991 and the BTRC being a Government Organization has been given exemption from payment of VAT under Clause-7 (Ab¨vb¨ †mev)(N) of the second schedule of the VAT Act, 1991.

II. Because, the High Court Division erred in law in making such direction inasmuch as implementation of such direction would create anomalies amongst the Government Organization, that is, NBR, Postal Department, Bangladesh Bank and City Corporation etc. by way of giving birth to some inevitable administrative problems of the VAT authorities.”

Consequently, Civil Appeal No.443 of 2016 arose.

Being aggrieved by and dissatisfied with the judgment and order dated 13.02.2012 passed by the High Court Division in Writ Petition No.8904 of 2011:

1. Writ-petitioner Grameenphone obtained leave to appeal in so far as it relates to the portion regarding VAT i.e. Civil Appeal No.135 of 2012;
2. Writ-respondent no.8 National Board of Revenue (NBR) has obtained leave to appeal in so far as it relates to the portion regarding writ-petitioner Grameenphone being entitled to credit or rebate against the VAT Act i.e. Civil Appeal No.136 of 2012;
3. Writ-respondent no.1 Bangladesh Telecommunication Regulatory Commission (BTRC) has obtained leave relating to declaring illegal the imposition

of Market Completion Factor (MCF) on spectrum fee assigned in 2008 i.e. Civil Appeal No.137 of 2012.

Mr. Mostafizur Rahman Khan, learned Advocate appearing for the appellant Grameenphone in Civil Appeal No.135 of 2012 and for the respondent no.1 in both Civil Appeal Nos.136-137 of 2012 submits that Sub-Section 3(Ga) of Section 3 of the VAT Act, 1991, provides that VAT will be paid by service provider and Section 5(4) of the VAT Act, 1991, provides that in case of service, VAT will be imposed on the total receivable and in the present case VAT will be charged from and on account of the receivable by the service provider namely BTRC and cannot be imposed as an additional liability on the petitioner as the recipient of service. He further submits that the High Court Division failed to appreciate that Section 6 (4KaKa) of the VAT Act, 1991 read with Rule 18(Ka) and 18(Uma) of the VAT Rules, 1991 do not impose VAT on either the provider or recipient of a service but clarifies and determines a procedure for realization of the VAT which is payable by the provider of certain services against the service rendered by it, i.e. by the recipient of the service deducting the VAT payable at source from the amount that is receivable by the service provider from the recipient of the service and on that view of the matter, the said provisions cannot be read as imposing an obligation on the recipient of the service to calculate the VAT and add it to the amount demanded by the provider of the service and then withhold it at source and pay it to the Government.

Mr. Sk. Md. Morshed learned Additional Attorney General, appearing for the appellant NBR in Civil Appeal No.136 of 2012 and for respondent no.7 in Civil Appeal No.135 of 2012 as well as for respondent no.7 in Civil Petition for Leave to Appeal No.1128 of 2012 submits that the Parliament through Finance Act, 2011 has inserted Clause-(Uma) of Sub-Section 3 of Section 3 which clearly states that VAT will be imposed at the rate of 15% on all the imported goods or services rendered in Bangladesh under Section 5 of the VAT Act barring the imported goods mentioned in first schedule and services mentioned in second schedule of the Act and Sub-Section 3(Uma) of Section 3 of the VAT Act provides:

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(K)           -----------------------------

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And the provisions of Rule 18(Uma) provided for deduction of VAT at source at the time of receipt of the fees royalty, charge etc., and Rules 18(Uma) authorize the Government to collect VAT at source at the rate of 15%. He also submits that Section 5 of the VAT Act provides VAT is payable upon the “total value received” from the receiver of goods or service and the same has been affirmed by this Division in Civil Petition for Leave to Appeal No.3720 of 2015 (Grameenphone Limited vs. Government of Bangladesh and others) and accordingly the argument placed by the Cellular Phone Companies that VAT is included with the total value, is not tenable in the eye of law. He next submits that exemption has given in Clause-7(Gha) of second schedule for “Government, Local Authority, any Organization or Institution of the local body who works for the Government” from paying any VAT but it does not preclude them or BTRC to collect VAT as the service provider. In this regard he submits that NBR, Bangladesh Bank, City Corporation or land revenue authority although are engaged in realizing VAT through deduction at source but does not have VAT registration and just like those organizations BTRC being a Government organization is not required to be registered with the VAT authority and have been exempted from payment of VAT under Clause-7(Gha) of the second schedule of the VAT Act, 1991. He further submits that VAT paid by the cellular mobile phone operator on the spectrum fees and the license fees are not rebatable as per Section 9(Uma) of the VAT Act because spectrum provided to the cellular companies is a range of wave of radio frequencies which is uniquely distinguishable by intangible boundaries, i.e. while spectrum allotted to one cellular phone company cannot be used by others as such the same come within the purview of infrastructure and thus the argument of the appellant that the infrastructure cannot be intangible does not hold water.

Mr. Khandaker Reza-E-Raquib, learned Advocate appearing for the appellant BTRC in Civil Appeal No.137 of 2012 and for respondent no.1 in Civil Appeal No.135 of 2012, respondent no.2 in both Civil Appeal Nos.136 of 2012 and 443 of 2016 as well as for respondent no.1 in Civil Petition for Leave to Appeal No.1386 of 2012, respondent no.7 in Civil Petition for Leave to Appeal No.1936 of 2012, respondent no.3 in Civil Petition for Leave to Appeal No.1637 of 2014 and respondent no.1 in both Civil Petition for Leave to Appeal Nos.1128 of 2012 and 377 of 2013 submits that the High Court Division has failed to appreciate that Market Competition Factor (MCF) introduced by the Guidelines, 2011 has been set by BTRC and approved by the Ministry of Post, Telecommunication and Information Technology to ensure a level playing ground for all Cellular Telephone Operators based on operators market share alongwith other relevant factors and the BTRC did not claim MCF retrospectively by the impugned memo for the period of 2008-2011 rather claimed MCF for the remaining 15 years i.e. from 2011-2026 and as such Grameenphone does not have to pay MCF for the initial 3 years starting from 2008 till the introduction of MCF in 2011 as per Clause-9.01 of the Guidelines,

Mr. A. M. Amin Uddin, learned Attorney General appearing for the appellants in Civil Appeal No.443 of 2016 as well as for respondent nos.1/2 in Civil Petition for Leave to Appeal No.1936 of 2012, respondent nos.1/4 in Civil Petition for Leave to Appeal No.1637 of 2014 and respondent no.8 in Civil Petition for Leave to Appeal No.377 of 2013 submits that the High Court Division erred in law in holding that the continued non-registration status of the BTRC appeared to be anomalous in the facts and circumstances inasmuch as the said observation is far from the reality and based on mere surmise having no legal and material basis as NBR, Postal Department, Bangladesh Bank, City Corporation and Land Revenue Authority although engaged in realizing VAT through deduction at source having no registration under VAT Act, 1991 and the BTRC being a Government organization has been given exemption from payment of VAT under Clause-7 (Ab¨vb¨ †mev)(Ga)(Gha) of the second schedule of the VAT Act, 1991. He also submits that the High Court Division erred in law in making such direction inasmuch as implementation of such direction would create anomalous amongst the Government organization, i.e. NBR, Postal Department, Bangladesh Bank and City Corporation etc. by way of giving birth to some inimitable problems of the VAT Authorities.

The writ-petitioner i.e. Axiata (Bangladesh) Ltd. alias Robi Axiata Ltd. of Writ Petition No.157 of 2012 did not file appeal challenging judgment and order passed in the Writ Petition No.157 of 2012.

Heard the learned Attorney General, learned Additional Attorney General and learned Advocates appearing for the parties in the respective cases. Perused the impugned judgment and order alongwith papers/ documents contained in the paper books.

As it is stated above, the High Court Division passed the impugned judgment and order in Writ Petition No.8904 of 2011 dated 13.02.2012 from which Civil Appeal Nos.135- 137 of 2012 arose.

In the Writ Petition No.8904 of 2011, the Rule Nisi was issued in the following terms:

“Issue a Rule Nisi calling upon the respondents to show cause as to why the decision of the respondent no.1 (BTRC) issued vide Memo No. BTRC/LL/Mobile/License dated 17.10.2011 (Annexure-I)(“Impugned memo”) under the signature of the respondent no.4 claiming Spectrum Assignment Fee based on the Market Competition Factor (MCF) in so far as it relates to the fee of already assigned spectrum (7.4 MHz-1800 band) to the petitioner in 2008 and payment of license fee and spectrum fee for new assignments without any deduction should not be declared to have been issued without lawful authority and of no legal effect.”

From the facts before us it appears that in 2008 the BTRC granted the disputed spectrum of 7.4 band in 1800- MHz vide assignment letter dated 30.10.2008. Prior to this assignment, there were correspondences between the parties, and terms and conditions of the said assignment were determined through such correspondences and negotiations. One of the Assistant Director of spectrum management of the BTRC confirmed the terms and conditions of the said assignment by letter dated 30.09.2008 and the parties having agreed, BRTC issued assignment letter dated 30.10.2008. The relevant terms and conditions mentioned in the said Assignment Letter are quoted below:

“Terms and Conditions:

1. The assignment will be for 18 years from the date of assignment subject to the renewal of the license. Within 18 years if the license is renewed there will not be any additional charge for this particular assignment for current technology (GSM, GPRS and EDGE);
2. The licensees will be allowed to provide services with this spectrum according to the conditions of the cellular mobile license. However, to utilize the frequency for 3G, LTE or equivalent technology based services the licensee will be required to take permission from the Commission. In such cases conditions and terms may be varied as deemed necessary by the Commission;
3. The Commission reserves the rights to make any rearrangement in the assignment within

the band if required in future and the equipment shall have the provision to readjust according to that rearrangement.

4. The operators have to pay the Annual Spectrum Charge for this assignment as per spectrum pricing formula.
5. The Commission reserves the right to make any change in the charges or levies from time to time and the Licensee shall abide by the decision of the Commission.
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The facts as gathered from the affidavit-in-

opposition filed by the BTRC that the Grammenphone was assigned with an additional 7.4 MHz spectrum in GSM-1800 MHz Frequency Band vide memo dated 30.10.2008 under the signature of the writ-respondent no.5 for a period of 18 years from the date of assignment subject to the renewal of the license. Accordingly, the Grameenphone paid the requisite amount to the BTRC and obtained the said additional 7.4 MHz Spectrum in the said Frequency Band. Clause-1 of the said assignment letter dated 30.10.2008 states that there will not be any additional charge if the licence is renewed within the said 18 years for this particular assignments for current technology. But Clause-5 of the said assignment letter also states that the BTRC reserves the right to make any change in the charges or levies from time to time and that the licensee shall abide by such decision of the BTRC. On 11.09.2011, BTRC with the approval of the Government has issued the Regulatory and Licensing Guidelines for Renewal of Cellular Mobile Phone Operator License  (Guidelines, 2011). Clause-8.01(ii) of the said Guidelines states that the Spectrum Assignment Fees for Cellular Mobile Phone Operator Licence fixed at Tk.150 crore per MHz of GSM 1800 MHz band, GSM 900 MHz band, CDMA 800 MHz band and also EGSM band access frequency. The said clause further states that in determining the Spectrum Assignment Fees, the MCF based on market share of the respective operators shall also be taken into consideration. The concept of MCF is not unique in telecommunication sector. Throughout

appreciation, the impugned memo is reproduced below:

Bangladesh Telecommunication Regulatory Commission

IEB Bhaban, Ramna, Dhaka-1000, Bangladesh.

No.BTRC/LL/Mobile/Lincese Renewal(382)/2011-687    Dated:17.10.2011

Subject: Notification of awarding Renewed Cellular Mobile

Phone Operator License of Grameenphone Limited (GP).

Ref: (i) GP’s  application  bearing  No.GP/CA-LR/2011/01,

dated: 10.10.2011 for renewal of Cellular Mobile Phone Operator License.

(ii)   GP’s  application  bearing  No.GP/CA-LR/2011/02, dated:  10.10.2011  for  renewal  of  Radio Communications Equipment License.

(iii)                      Regulatory and Licensing Guidelines for Renewal of  Cellular  Mobile  Phone  Operator  License bearing No:BTRC/LL/Mobile/License Renewal (342)/ 2009-563, dated 11.09.2011 (Guidelines).

With reference to the application mentioned in ref. (i) and (ii), the undersigned is directed to inform you that  renewal  of  the  Cellular  Mobile  Phone  Operator License of GP would be considered upon fulfilment of the followings:

(a)       Under Clause-7.1.3 of the Guidelines, GP shall pay BDT 10,00,000,00/- (Taka Ten Crore) only as the License Renewal Fee.

(b)       Under  Clause-8.01  (ii)  and  Clause-9,  of  the Guidelines, GP shall pay BDT 3624.03 Crore (Taka Three Thousand Six Hundred Twenty Four point Zero Three Crore) only as the Spectrum Assignment Fee against the spectrum allocated to GP.

Spectrum Fee Calculation:

(c)       Payment  Schedule,  as  per  provisions  of Guidelines [Clause-8.01 (iii)]

(d)       Documents to be submitted are listed below:

1. Documents related to Income tax & VAT from year 1997 to 2001 and PSI from 1997 to 2004 (as per provisions of serial 7, appendix 1 of Guidelines).
2.      Information regarding compensation paid for illegal VoIP in the history of non-compliance (as per provisions of serial 14, appendix 1 of Guidelines).
3. Information  relating  to  year-wise  inward  and outward fund flow/transaction and year-wise income, expenditure and profit (as per provisional of serial 5, appendix 1 of Guidelines).

You are requested to pay the above mentioned amount without any deduction as per provisions of Guidelines and submit the documents as stated above in Clause-(d) to the commission within 10(ten) days from the date of issuance of this notification.

Thanking you.

Signed/-       (Tareq Hasan Siddiqui)

Deputy Director      Legal and Licensing Divsion Phone: 9511127

Chief Executive Officer Grameenphone Limited GP house

Bashundhara, Baridhara Dhaka-1229, Bangladesh.

Analysing the aforementioned contention of the appellant BTRC in Civil Appeal No.137 of 2012 as well as the impugned memo dated 17.10.2011, we are of the opinion that MCF based on the market shares of the operators is a worldwide system through which the mobile phone operators pay a significant amount of money for the spectrum allocated infavour of them and this system ensures a level playing field amongst the operators. And since the concept of MCF introduced by the Guidelines, 2011, BTRC by the impugned memo did not claim spectrum assignment fees based on MCF retrospectively i.e. from 2008 to 2011.

It is pertinent to mention here that Clause-5 of the Assignment Letter dated 30.10.2008 as well as Clause- 12(viii) of the Guidelines, 2011 authorize the authority concern i.e. BTRC to reserves the right to make any change in the charges or levies from time to time and the mobile phone operators shall abide by such decision. Again, upon the facts and circumstances of this case, we found that BTRC did not claim any additional charge for the said spectrum of 7.4 MHz-GSM 1800 frequency band as assigned infavour of Grameenphone in 2008 rather BTRC claiming MCF for the remaining 15 years from 2011 upon a value of Tk.80 crores per MHz which is fixed in the year 2008. Thus, we find substance in the contentions of the appellant BTRC in Civil Appeal No.137 of 2012.

As such findings and observations of the High Court Division that  “The impugned memo dated 17.10.2011 (Annexure-‘I’), in so far as the application of MCF to the assignment of spectrum of 2008 is concerned, is without lawful authority and accordingly, the petitioner Grameenphone is not required to payment the MCF for the 7.4 spectrum in 1800-MHz assigned to infavour in 2008” is based on wrong appreciation of the impugned memo and thus liable to be expunged.

It may be mentioned here that spectrum is a scarce natural resource. Article 18A of our Constitution provides that:

“The state shall endeavour to protect and improve the environment and to preserve and safeguard the natural resources, bio- diversity, wetlands, forests and wild life for the present and future citizens.”

(emphasis supplied)

Again, Article 7 of the Constitution states that:

“7(1) All powers in the Republic belong to the people, and their exercise on behalf of the people shall be effected only under, and by the authority of, this Constitution.”

Above mentioned Articles of the Constitution makes it clear that the state is the legal owner of the natural resources as a trustee of the people and although it is empowered to distribute the same, the process of distribution must be guided by the Constitutional principles including the doctrine of equality and larger public good.

It is stated in the Guidelines for the review of spectrum pricing methodologies and the preparation of spectrum fee schedules that the determination of spectrum prices and establishment of spectrum fees are closely linked to economic and market conditions, technical factors such as which technologies and services are being used or deployed, the efficiency and quality of those technologies and services, and how spectrum is assigned to spectrum users. The most important spectrum management objectives associated with spectrum prices and fees is that, the spectrum prices should promote efficient use of spectrum. When spectrum prices are determined through market mechanism, price level at a given time may be influenced by a number of factors such as geography, competition amongst potential users, advances in technology, the present value of cash flows derived from a particular service over time, the general economic climate, and particular conditions and obligations to licensees.

It is further stated that the authority concern will need to consider various issues when dealing upon the method, the financial basis, amounts and timing for payment of fees in respect of a particular spectrum brand, type of use or type of user. The issued include:

1. Fiscal context;
2. Relevant principles and objectives for certain types of spectrum fees;
3. Funding regulator operations;
4. Demand and supply for spectrum;
5. Technological change;
6. Type and duration of the spectrum authorization and renewal options.

Furthermore, the value of spectrum fees depends upon changing technologies, international and national decisions on spectrum, allocations and harmonization, customer demand, and the commercial availability and cost of radio communications equipment. These factors may greatly affect both demand and supply.

It is most likely that a regulator will chose from several methods to establish spectrum prices and fees. Before doing so, the regulator should review legislation, policy, and regulation. The level of competition, sector health and the demand and supply of spectrum are additional important considerations. The availability of reliable data, systems, adequately experienced and proficient staff will be necessary. Once the regulator has completed this assessment, the final decision rests with what spectrum management and spectrum pricing objectives are to be meet.

Again, fairness and objectivity requires that fees are based on objectives factors and all licence holders in a given frequency band should be treated on an equitable basis. This would preclude, for example, different treatment users in a given frequency band.

The universal system of spectrum pricing module can be formulated from a number of separate elements based on any or all of various criteria such as the amount of spectrum user, number of channels or links used degree of congestion, efficiency of radio equipment, transmitted power/coverage area, geographical location and so forth. The basic principle for this approach is to identify various technical parameters in order to measure the spectrum volume used or define the ‘population area’ of a radio system as a common basis for establishing spectrum fees. (from the Guidelines methodologies)

We consider it proper to observe that even though there is no universally accepted definition of natural resources, they are generally understood as elements having intrinsic utility to mankind. They may be renewable or non-renewable. They are thought of as the individual elements of the natural environment that provided economic and social services to human society and are considered valuable in their relatively unmodified, natural form. A natural resource’s value rests in the amount of the material available and the demand for it. The latter is determined by its usefulness to production. Natural resources belong to people but the State legally owns them on behalf of its people and from that point of view natural resources are considered as national assets, more so because the State benefits immensely form their value. The State is empowered to distribute natural resources. However, as they constitute public property/national asset, while distributing natural resources, the State is bound to act in consonance with the principles of equality and public trust and ensure that no action is taken which may be detrimental to public interest.

 The Supreme Court of India in the case of Centre for Public Interest Litigation and Others vs. Union Of India & Ors., reported in (2012) 3 SCC 104 observed that:

“Since, spectrum is a scarce resources, it needs to be regulate separately. Spectrum should be distributed using such a mechanism that it is allocated optimally to the most efficient user. ---------------------------- -------------------------------------------- we hold that the State is the legal owner of the natural resources as trustee of the people and although it is empowered to distribute the same, the process of distribution must be guided by the Constitutional principles including the doctrine of equality and larger public good.”