“Corporate Tax Planning and Management”

Case Study:

“2G Spectrum Case”

Semester- VIII

Submitted to: Submitted by:

Mrs. Nilima Panda Yash Purviya

(Taxation Law faculty) 1582126 BA.LLB (B)

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What is 2g Spectrum?
2g is an abbreviation of wireless telephone technology. The word “spectrum” refers to range of
radio waves that are used for communication purpose. Since waves surround us all the time and
pass through everything, this means that spectrum needs to be monitored.
So the government divides the spectrum which is a national wealth into bands and manages the
spectrums across the country by assigning to different telecom circle.
Thus, in order for a telecom company to offer continual access across India, it would have to bid
for spectrum licenses in 22 existing circles. Now a spectrum like any other natural resource is
required to be auctioned by the government to companies that can use this to provide a number of
service.

What Was the Case?

The scam dates back to 2011 when A Raja, the main accused and telecom minister from2007 to
2010, was arrested by the CBI on charges of colluding with private companies and granting them
spectrum license at unjust low prices causing a huge loss to the public exchequer. The Supreme
Court on a PIL even declared the allotment as unconstitutional and cancelled the 122 license issued
under A Raja ministerial period. Following were the key irregularities found in this case:

 Undervalued the telecom spectrum lending to a presumptive loss of Rs. 1.76 lakh crore,
according to Comptroller and Auditor General Report.
 License distribution was done on a distorted first come first serve basis and that too at 2001
prices when a competitive bidding process should been followed.
 Granting license to front companies which was not allowed. For eg- Swan Telecom was
not even allowed to bid for spectrum being a front company for the Reliance Anil
Dhirubhai Ambani Group.
 Cut off dates were advanced arbitrary to 25th September from 1st October 2007 without
informing TRAI. Moreover, allegedly application counters were shut to block competing
companies from applying for license. It is said on 25th September, the DOT announced on
its website that applicant filling between 3:30 and 4:30 pm that day would be granted
license.
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Judgement:
On 21 December 2017, the special court in New Delhi acquitted all accused in the 2G spectrum
case including prime accused A Raja and Kanimozhi. This verdict was based on the fact that CBI
could not find any evidence against the accused in those 7 years. As per the judgement, "Some
people created a scam by artfully arranging a few selected facts and exaggerating things beyond
recognition to astronomical levels. On 19 and 20 March 2018, the Enforcement Directorate and
CBI respectively filed appeals against this verdict in the Delhi High Court.

Does the 2g spectrum case raise question on the capability about

efficacy of the institution of CBI?
Despite filing the charge sheet of more than 80,000 pages supported by CAG findings of loss to
the exchequer to the tune of 1.76 lakh crore and further investigation of more than 6 years, CBI
failed to establish the criminality of any of the accused. This raises question on the CBIs credibility
as an institution. Moreover, the image has not only been dented by this case but also due to its
conduct in the previous cases.

The root of the problem is that the CBI does not have a proper statuary enactment which can ensure
its autonomy.

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