Jammu and Kashmir High Court slaps Rs 10 lakh fine each on seven telecom companies

SRINAGAR: The Jammu and Kashmir High Court today imposed a fine of Rs 10 lakh each on seven major telecommunication companies and directed them to pay the entry tax on their equipment as demanded by the state government.

Dismissing a bunch of writ petitions filed by the telecommunication companies, Justice Muzaffar Hussain Attar upheld the state's plea that the equipment brought in by them were being used for commercial purposes and should be subjected to entry tax.

The court also imposed a fine of Rs 10 lakh each on the seven companies which included Bharti Airtel, Idea Cellular, Reliance Communications, Tata Services and Dishnet Communication.

The fine imposed on these companies shall be spent on welfare of orphans in the state, it said.

The telecommunication companies had filed seven writ petitions challenging the constitutionality of the J&K Entry Tax Act on the ground that it violates Article 301 of the Constitution of India.

The state government had contested the petition arguing that the Entry Tax Act was a regulatory measure to prevent evasion of sales tax by unscrupulous traders.

The state government will now realise Rs 459 crore as entry tax from these telecommunication companies for a period of last five years.