1. As common question of law and facts arise in this group of petitions, all these petitions are decided and disposed of by this common judgment and order.
2. In all these petitions under Article 226 of the Constitution of India, respective petitioners have challenged the impugned demand notices issued by the respective Municipal Corporations demanding the property tax on the respective Mobile Towers installed by the respective petitioners.
2.1 At the outset it is required to be noted that this is the second
round of litigation and the attempt on the part of the respective
petitioners to avoid payment of property tax on the Mobile Towers.
Earlier mobile telecommunication service providers like the petitioners
raised the question of levy of property tax on Mobile Towers and also
challenged the vires of section 145A of the Gujarat Provincial Municipal
Corporations Act, 1949 (hereinafter referred to as "GPMC Act") before
this Court. The respective telecommunication service providers like the
petitioners succeeded before this Court and the Division Bench of this
Court declared section 145A of the GPMC Act as ultra vires to the
Constitution of India more particularly legislative Entry No.49 of List II
and held that Mobile Towers cannot be stated to be a "building" and
therefore, to levy the tax on Mobile Towers treating the same as
"building", is beyond the competence of State Legislature to provide for
taxation. That by common judgment and order dated 16.12.2016 passed
in Civil Appeal Nos.5360 - 5363/2013, the Hon''ble Supreme Court has
allowed the said appeals and quashed and set aside the decision of the
High Court and has held "Mobile Towers" as "land and building" and
therefore, it is held that the State is having the competency to enact the
law to levy the tax on Mobile Towers. At this stage it is required to be
noted that during the pendency and final disposal of the appeals before
the Hon''ble Supreme Court against the decision of the Division Bench of
this Court, the Hon''ble Supreme Court stayed the judgment and order
passed by the Division Bench of this Court and stayed the order of
refund passed by the High Court, on condition that the respective
Corporations deposit the amount already collected, before the Hon''ble
Supreme Court. The Hon''ble Supreme Court also clarified that the
respective Corporations may determine the tax on Mobile Towers under
the GPMC Act and raise the demand on the respective Mobile Towers,
however, such demand shall not be enforced until disposal of the
appeals. The Hon''ble Supreme Court also observed that the
determination of such tax shall be subject to the final decision in the
appeals. Consequently, during the pendency of the appeals before the
Hon''ble Supreme Court, the recovery of tax was kept in abeyance. That
thereafter when the Hon''ble Supreme Court set aside the order passed
by the Division Bench of this Court and held against the respective
petitioners - Telecommunication Service Providers and upheld the vires
of section 145A of the GPMC Act, when the respective Corporations
raised the demand of the property tax on the Mobile Towers for the past
period as well as current periods, at that stage again the respective
petitioners - Telecommunication Service Providers have preferred the
present Special Civil Applications again challenging the demand of
property tax on the Mobile Towers, which is the subject matter of the
respective petitions.
3. Shri Mihir Joshi, learned Senior Advocate, Shri S.N. Soparkar,
learned Senior Advocate, Shri K.S. Nanavati, learned Senior Advocate,
Shri Shalin Mehta, learned Senior Advocate, have appeared on behalf of
the respective petitioners in the respective petitions. Shri Kamal Trivedi,
learned Senior Advocate has appeared on behalf of the Ahmedabad
Municipal Corporation and Shri Prashant G. Desai, learned Senior
Advocate has appeared on behalf of the Surat Municipal Corporation
and Shri H.S. Munshaw, learned Advocate has appeared on behalf of the
Rajkot Municipal Corporation. We have heard learned Counsel
appearing on behalf of the respective parties at length.
4. Shri Mihir Joshi, learned Counsel appearing on behalf of some of the petitioners has vehemently submitted that the impugned demand of property tax at the rates fixed under the relevant Taxation Rules and applying the same to the Mobile Towers is absolutely illegal.
4.1 It is further submitted by Shri Joshi, learned Counsel appearing on
behalf of some of the petitioners that unless and until and as so provided
under Section 145A of the GPMC Act, the State Government determines
the maximum rates of tax on Mobile Towers, there cannot be any
demand of property tax on the Mobile Towers.
4.2 It is further submitted by Shri Joshi, learned Counsel appearing on
behalf of some of the petitioners that if the impugned property tax bills
are seen it reveal that same are based upon calculation of property tax
on the basis of the factors, multipliers, location, age of the building etc.
which are, as per the relevant Taxation Rules applicable to Land and
Buildings. It is submitted that the impugned notices / bills as such
nowhere refer to the rate as prescribed under Section 145A of the GPMC
Act. Therefore, it is submitted that the impugned notices / demand of
property tax on the Mobile Towers are issued without following the
procedure as prescribed in the Statute more particularly Section 145A of
the GPMC Act.
4.3 It is further submitted by Shri Joshi, learned Counsel appearing on
behalf of some of the petitioners that it is true that the Hon''ble Supreme
Court has upheld the vires of Section 145A of the GPMC Act, however
the Hon''ble Supreme Court has treated and/or considered the "Mobile
Tower" as "land and building" only for the purpose of Entry 49 of List II
of the Constitution of India. It is submitted that as such from the
judgment and order passed by the Hon''ble Supreme Court by which the
Hon''ble Supreme Court has held section 145A of the GPMC Act
constitutionally valid, the Hon''ble Supreme Court has not specifically
observed that the "Mobile Towers" shall be treated and/or considered as
"land and building" for the purpose of levy of property tax under the
provisions of the GPMC Act. It is submitted that only for the purpose of
considering the legislative competence of the State to impose tax on
Mobile Towers, the "Mobile Towers" are held to be "land and building"
within the meaning of Entry 49 of List II of the VIIth Schedule to the
Constitution.
4.4 It is submitted that assuming that Section 145A of the GPMC Act
is held to be ultra vires and/or constitutionally valid and the competence
of the State Government to impose the tax on Mobile Towers,
considering Entry 14 of List II of the VIIth Schedule to the Constitution is
upheld and/or held to be valid, in that case also, considering section
145A of the GPMC Act, unless and until maximum rates are prescribed
by the State Government, in that regard, there cannot be any demand of
property tax on the Mobile Towers under / as per the General Taxation
Rules. It is submitted that as per Section 145A of the GPMC Act, in case
of none of the Corporations, the State Government has come out with
any Notification prescribing the maximum rates of tax on the Mobile
Towers as required under Section 145A of the GPMC Act. It is submitted
that therefore, the impugned demand of property tax on the Mobile
Towers by the impugned bills is absolutely illegal and contrary to the
provisions of the Statute which deserves to be quashed and set aside.
4.5 It is further submitted by Shri Joshi, learned Counsel appearing on
behalf of some of the petitioners that section 145A of the GPMC Act is a
special provision for levy of property tax on Mobile Towers. It is
submitted that therefore unless and until the maximum rates are
prescribed by the State Government as required / provided under
Section 145A of the GPMC Act and any procedure as per section 99 of
the GPMC Act is followed, there cannot be any demand of property tax
on the Mobile Towers and that too on the basis of the General Property
Tax Rules applicable to buildings and lands.
4.6 It is further submitted by Shri Joshi, learned Counsel appearing on
behalf of some of the petitioners that the property Taxation Rules shall
be applicable with respect to the property tax levied under section 129
or section 141AA of the GPMC Act and not under Section 145A of the
GPMC Act.
4.7 It is further submitted by Shri Joshi, learned Counsel appearing on
behalf of some of the petitioners that as such "Mobile Tower" cannot be
said to be a building and/or even land. It is submitted that the term
"building" is defined under Section 2(5), term "land" is defined under
Section 2(30). It is submitted that "Mobile Tower" is separately defined
under section 2(34AA). It is submitted that therefore the "Mobile Tower"
cannot be said to be either building or land as per section 2(5) and
section 2(30) of the GPMC Act and therefore, the Corporation cannot
demand the property tax on Mobile Towers treating the same as building
or land, under the General Property Tax Rules applicable to the building
and land.
4.8 Shri Joshi, learned Counsel appearing on behalf of some of the
petitioners has taken us to various provisions of the GPMC Act more
particularly Sections 127, 127C, 129, 141AA, 141B, 99 and 145A of the
GPMC Act in support of his submissions that the Corporation cannot
demand the property tax on the basis of the general property tax
applicable to the building and land and that the demand of tax on the
basis of the general property tax applicable to the lands and building is
contrary to the aforesaid provisions of the Statute.
4.9 It is further submitted by Shri Joshi, learned Counsel appearing on
behalf of some of the petitioners that even otherwise the impugned
demand of property tax on Mobile Towers is ultra vires to Article 243X of
the Constitution of India. It is submitted that as provided under Article
243X of the Constitution of India, State Government cannot impose any
tax without authority under the law. It is submitted that therefore when
the procedure as required under Section 145A of the GPMC Act has not
been followed and the State Government has not prescribed any
maximum rate of tax on the Mobile Towers, the impugned demand of
property tax can be said to be without the authority under the law and
therefore, ultra vires the Article 243X of the Constitution of India.
Making above submissions, it is requested to admit / allow the
present petitions and quash and set aside the impugned demand of
property tax on the Mobile Towers treating the same as land and
building and applying the relevant General Property Tax Rules
applicable to lands and buildings.
5. Shri Shalin Mehta, learned Senior Advocate appearing on behalf
of some of the petitioners has adopted the submissions made by Shri
Joshi, learned Counsel appearing on behalf of some of the petitioners
referred to hereinabove.
5.1 In addition Shri Mehta, learned Counsel appearing on behalf of
some of the petitioners has vehemently submitted that in the present
case the impugned demand of property tax is on the basis of the carpet
area and other factors as per the general property tax applicable to
building and land. It is submitted that property tax is defined under
Section 2(49) of the GPMC Act and as per section 2(49) of the GPMC
Act, the property tax can be levied as per the rateable value of the
property. It is submitted that the "rateable value" is defined under
Section 2(54) of the GPMC Act. It is submitted that even otherwise as
per Sections 2(5), 2(30) and 2(34AA) of the GPMC Act, land, building
and Mobile Towers are to be considered separately and distinctly. It is
submitted that therefore the impugned demand of property tax is
absolutely illegal and without authority under the law.
5.2 It is further submitted by Shri Mehta, learned Counsel appearing
on behalf of some of the petitioners that by the impugned demand /
bills, the Corporation has also raised the demand of water tax and
conservancy tax. It is submitted that "Mobile Towers" do not require any
water. It is submitted that therefore the impugned levy of water tax and
conservancy tax is also absolutely illegal and bad in law.
6. Shri S.N. Soparkar, learned Senior Advocate appearing on behalf
of some of the other petitioners has also adopted the submissions made
by Shri Joshi, learned Counsel appearing on behalf of some of the
petitioners referred to and recorded hereinabove. In addition he has
further submitted that the Hon''ble Supreme Court has not treated the
"Mobile Towers" as "building" as defined under the provisions of the
GPMC Act. It is submitted that "Mobile Towers" are treated as "building
and land" only for the purpose of constitutional validity and the
competence of the State Government to levy the tax under Entry 49 of
List II of the Constitution of India. It is submitted that "Mobile Tower" is
separately defined and therefore, the same cannot be treated and/or
considered as "building or land" and on that basis i.e. treating the
Mobile Tower as land and building, there cannot be any demand of
property tax applying the General Property Tax Rules applicable to land
and building.
6.1 It is further submitted by Shri Soparkar, learned Counsel
appearing on behalf of some of the other petitioners that as such there is
a possibility of conflict between the provisions of sections 141AA and
145A, if the true meaning of section 145A of the GPMC Act is not given.
It is submitted that section 145A of the GPMC Act provides the
prescription of maximum rate of tax prescribed by the State Government
for levy of the property tax on Mobile Towers. It is submitted that it is an
admitted position that the State Government has not prescribed any
maximum rates of property tax on the Mobile Towers and therefore,
even if section 141AA of the GPMC Act provides for maximum and
minimum rate of tax, as the maximum rate of tax is not prescribed by
the State Government as required under Section 145A of the GPMC Act,
the Corporation may impose any rate of tax. It is submitted that
therefore there shall be a possibility of conflict between two provisions
i.e. section 141AA and 145A of the GPMC Act.
7. Shri K.S. Nanavati, learned Senior Advocate appearing on behalf
of some of the other petitioners has also adopted the submissions made
by Shri Joshi, learned Counsel appearing on behalf of respective
petitioners.
8. All these petitions are opposed by Shri Kamal Trivedi, learned Senior Advocate appearing on behalf of the Ahmedabad Municipal Corporation and Shri Prashant Desai, learned Senior Advocate appearing on behalf of the Surat Municipal Corporation.
8.1 It is vehemently submitted by Shri Trivedi, learned Senior
Advocate appearing on behalf of the Ahmedabad Municipal Corporation
that as such this is an another attempt on the part of the concerned
respective telecommunication service providers not to pay the property
tax on the Mobile Towers. It is submitted that having failed before the
Hon''ble Supreme Court in challenge to Section 145A of the GPMC Act
and the demand of property tax on the Mobile Towers, thereafter the
petitioners have preferred the present petitions.
8.2 It is vehemently submitted by Shri Trivedi, learned Counsel
appearing on behalf of the Ahmedabad Municipal Corporation that as
such very bills and the demand of property taxes under the very bills
were under challenge earlier, which were set aside by the Division Bench
of this Court and subsequently the Hon''ble Supreme Court has upheld
the levy and demand of property tax on the Mobile Towers as well as
upheld the demand of property tax bills. It is submitted that therefore
now it is not open for the respective petitioners to challenge the demand
of property tax on the Mobile Towers which has been upheld by the
Hon''ble Supreme Court.
8.3 It is further submitted by Shri Trivedi, learned Counsel appearing
on behalf of the Ahmedabad Municipal Corporation that the Hon''ble
Supreme Court while upholding the constitutional validity of section
145A of the GPMC Act has specifically observed and held that the
"Mobile Towers" are "land and building" and therefore, the State
Government has the competence to impose the tax / property tax on
"Mobile Towers" (treating and considering it as a building). It is
submitted that therefore once the Hon''ble Supreme Court has held and
considered the "Mobile Towers" as land and building, the levy of
property tax treating the same as building and applying the General
Property Tax Rules applicable to land and building is just and proper
and in consonance with the provisions of the GPMC Act. It is submitted
that therefore sections 127, 129, 141B, 141AA read with relevant
Taxation Rules and sections 2(5), 2(30), 2(34AA) of the GPMC Act are
required to be read harmoniously and conjointly. It is submitted that
therefore, the impugned demand of property tax cannot be said to be
illegal and/or contrary to any of the provisions of the GPMC Act.
8.4 It is further submitted by Shri Trivedi, learned Counsel appearing
on behalf of the Ahmedabad Municipal Corporation that in the taxation
matters there shall be three elements which are required to be
considered viz. (1) competence; (2) incidence of tax and (3) rate of tax.
It is submitted that competence to levy the tax on Mobile Towers is now
as such cannot be disputed in view of the decision of the Hon''ble
Supreme Court. It is submitted that incidence of tax on erection of the
Mobile Towers also cannot be disputed. It is submitted that so far as rate
of tax is concerned, the same is applied considering the aforesaid
provisions and applying the formula as per the relevant General Property
Tax Rules treating the Mobile Towers as "building and land".
8.5 Now, so far as the submission on behalf of the respective
petitioners that the Hon''ble Supreme Court has considered and/or
treated the "Mobile Towers" as "land and building" only for the purpose
of constitutional validity of section 145A of the GPMC Act and while
considering Entry 49 of List II of the Constitution of India and that the
Hon''ble Supreme Court has not treated the "Mobile Tower" as "building"
as defined under the GPMC Act is concerned, Shri Trivedi, learned
Counsel appearing on behalf of the Ahmedabad Municipal Corporation
has vehemently submitted that there cannot be two and/or separate
definition of "building and land", one for the purpose of constitutional
validity and another under the Statute. It is submitted that once the
Hon''ble Supreme Court has considered and treated the "Mobile Towers"
as "land and building", the same is to be treated and considered for all
purpose as "land and building". It is submitted that therefore the
Corporation is justified in demanding the property tax treating the same
as land and building and applying the Property Tax Rules applicable to
"land and building".
8.6 It is further submitted by Shri Trivedi, learned Counsel appearing
on behalf of the Ahmedabad Municipal Corporation that in any case
when earlier the very bills were under challenge and the Division Bench
set aside the said bills and the decision of the Division Bench has been
set aside by the Hon''ble Supreme Court and has upheld the demand of
property tax on the Mobile Towers, and thereafter when the Corporation
has again raised the demand of property tax, the same cannot be said to
be illegal. It is submitted that as such thereafter it is not open for the
petitioners now again to challenge the demand of property tax which
has been upheld by the Hon''ble Supreme Court.
8.7 Now, so far as the challenge to the levy and demand of property
tax on the Mobile Towers as ultra vires to Article 243X of the
Constitution of India is concerned, it is submitted that the aforesaid
aspect has already been considered by the Division Bench of this Court
in the case of Adani Gas Limited vs. Ahmedabad Municipal
Corporation reported in 2013(0) GLHELHC
230 556 rendered in
Special Civil Application No.2576/2012 and other allied petitions.
Shri Trivedi, learned Counsel appearing on behalf of the
Ahmedabad Municipal Corporation has heavily relied upon paras 14, 15
and 16 to 18 of the decision of the Division Bench of this Court in the
case of Adani Gas Limited (Supra).
8.8 Shri Trivedi, learned Counsel appearing on behalf of the
Ahmedabad Municipal Corporation has also heavily relied upon the
decision of the Hon''ble Supreme Court in the case of Goodricke Group
Ltd. and Others vs. State of W.B. and Others reported in 1995 Suppl
(1) SCC 707 more particularly paras 8 and 13 to 20 in support of his
submissions that the impugned demand of property tax on the land on
which the Mobile Tower is erected is absolutely legal and valid.
8.9 It is further submitted by Shri Trivedi, learned Counsel appearing
on behalf of the Ahmedabad Municipal Corporation that earlier the very
demand of tax bills were challenged and the same have been upheld by
the Hon''ble Supreme Court. It is submitted that during the pendency of
the appeals before the Hon''ble Supreme Court, the Hon''ble Supreme
Court permitted the Corporation to adjudicate and raise the demand but
actual recovery was kept in abeyance. It is submitted that thereafter
when the Hon''ble Supreme Court has upheld the levy of demand of
property tax on the Mobile Towers including the demand of tax bills and
thereafter when the Corporation has issued the present bills to recover
the past as well as present property tax, it cannot be said that the
impugned demand is illegal. It is submitted that in the operative portion
of the order, the Hon''ble Supreme Court has not observed that thereafter
it will be open for the respective original petitioners to challenge the
demand of property tax on Mobile Towers, when in the case of Bombay
Corporation, the Hon''ble Supreme Court has specifically observed and
reserved the liberty with respect to cellular operators in the Bombay
cases to agitate the issue with respect to the retrospective operation of
the assessment/demand of tax and the quantum thereof before the
appropriate forum, if so advised. It is submitted that no such liberty has
been reserved in favour of the original petitioners. It is, therefore,
requested to dismiss the present petitions.
9. Shri Prashant Desai, learned Counsel appearing on behalf of the
Surat Municipal Corporation has adopted the submissions made by Shri
Trivedi, learned Counsel appearing on behalf of the Ahmedabad
Municipal Corporation. In addition thereto and while dealing with the
submission made by Shri Mehta, learned Counsel appearing on behalf of
some of the petitioners that as per section 2(49) of the GPMC Act, the
"property tax" is defined and the property tax can be levied on the basis
of the rateable value, it is submitted by Shri Desai, learned Counsel
appearing on behalf of the Surat Municipal Corporation that all the
relevant provisions of the GPMC Act including sections 2(5), 2(30),
2(34AA) are required to be read harmoniously and conjointly. It is
submitted that therefore, the impugned demand of property tax on
Mobile Towers which as such has been upheld by the Hon''ble Supreme
Court is absolutely legal and valid.
9.1 Now, so far as the challenge to the demand of water tax and
conservancy tax is concerned, it is submitted that considering the
provisions of Section 129 of the GPMC Act, water tax is levied and/or
demanded irrespective of whether a particular person uses the water
supplied by the Corporation or not. It is submitted that as per the
provisions of the GPMC Act, if in the area the Corporation is supplying
the water through its pipeline, there can be a demand of water tax. It is
submitted that therefore on "Mobile Towers" there cannot be any
demand of water tax, cannot be accepted.
9.2 It is further submitted by Shri Desai, learned Counsel appearing
on behalf of the Surat Municipal Corporation that the impugned demand
of property tax and the bills are issued after the Hon''ble Supreme has
held in favour of the Corporations and the demand is also with respect
to the property tax for the earlier period for which the Corporations
were permitted to adjudicate and raise the demand but actual recovery
was suspended during the pendency of the appeals before the Hon''ble
Supreme Court. It is submitted that as on today approximately more
than Rs.80 Crores are due and payable by the cellular operators /
telecommunication service providers. It is submitted that therefore the
present petitions be dismissed and the respective petitioners may be
directed to pay the property tax as per the impugned demand / bills
forthwith.
10. In rejoinder Shri Joshi, learned Counsel appearing on behalf
of some of the petitioners has submitted that as such earlier neither the
Division Bench of this Court nor the Hon''ble Supreme Court adjudicated
upon the rate of property tax and the demand of property tax.
10.1 It is further submitted by Shri Joshi, learned Counsel
appearing on behalf of some of the petitioners that section 2(1A) has
been enacted subsequent to section 145A of the GPMC Act has been
enacted. It is submitted that now it is an admitted position that the
Corporations have not invoked at all section 145A of the GPMC Act. It is
submitted that therefore the position is very clear and therefore, unless
and until the maximum rates of tax on the Mobile Tower is determined
and fixed by the State Government as per section 145A of the GPMC Act,
there cannot be any demand of the property tax on the Mobile Towers.
10.2 It is further submitted by Shri Joshi, learned Counsel that if
paras 23 and 30 of the decision of the Hon''ble Supreme Court are
considered, in that case, it can be said that the Hon''ble Supreme Court
while considering the competence of the State Government to impose
tax falling under Entry 49 of List II of VIIth Schedule to the Constitution
only has treated the "Mobile Towers" as "Building".
Making above submissions it is requested to admit / allow the
present petitions.
11. Heard learned Counsel appearing on behalf of the
respective parties at length.
At the outset it is required to be noted that this is an
another attempt on the part of the respective cellular operators /
telecommunication service providers avoiding to pay the property tax on
Mobile Towers. Earlier the respective cellular operators /
telecommunication service providers challenged the demand of property
tax on Mobile Towers and the vires of section 145A of the GPMC Act and
they have lost before the Hon''ble Supreme Court. After the Hon''ble
Supreme Court held section 145A of the GPMC Act constitutionally valid
/ intra vires and thereafter when the respective Corporations / Nagar
Palikas have again raised the demand of property tax, present petitions
are filed now again challenging the demand of property tax on Mobile
Towers.
At this stage it is required to be noted that during the
pendency of petitions before this Hon''ble Court earlier and in the earlier
round of litigation, the respective cellular operators / telecommunication
service providers were directed to deposit / pay 50% of the property tax
on the Mobile Towers and rest of the demand was stayed. That the
respective cellular operators / telecommunication service providers paid
50% of the property tax. That the Division Bench of this Court held
Section 145A of the GPMC Act ultra vires and consequently set aside the
demand of property tax on Mobile Towers and directed to refund the
property tax so deposited by the respective cellular operators /
telecommunication service providers. In the appeals before the Hon''ble
Supreme Court against the decision of the Division Bench of this Court,
the Hon''ble Supreme Court while admitting the SLP, stayed the
operation of the order passed by the Division Bench of this Court and
also stayed the order passed by the Division Bench to refund the
property tax already collected, however on condition that the respective
Corporations / Nagar Palikas to deposit the same. By way of interim
order the Hon''ble Supreme Court directed the respective Corporations to
raise the demand of property tax, however actual recovery was stayed,
during the pendency and final disposal of the appeals before the Hon''ble
Supreme Court. That thereafter after the judgment and order passed by
the Hon''ble Supreme Court quashing and setting aside the judgment and
order passed by the Division Bench of this Court, while upholding the
vires of section 145A of the GPMC Act, also upheld the demand of
property tax on the Mobile Towers, which were set aside by this Court.
That thereafter the respective Corporations / Nagar Palikas have issued
the impugned bills and raised the demand of property tax again for the
past period as well as current period. Under the circumstances, as such
thereafter it will not be open for the respective petitioners - cellular
operators / telecommunication service providers again to challenge the
demand of property tax which as such were already challenged and
subject matter of the petitions before this Court in earlier round of
litigation and before the Hon''ble Supreme Court. At this stage it is
required to be noted that as such the very bills / demand of property tax
were challenged before this Court as well as before the Hon''ble Supreme
Court and at that time no submissions were made before the Hon''ble
Supreme Court and/or no grievance was made before the Hon''ble
Supreme Court which is now made. As such by impugned demand of
property tax / bills the respective Corporations have sought to recover
the property tax on the Mobile Towers which ultimately came to be
upheld by the Hon''ble Supreme Court. At this stage it is required to be
noted that as observed hereinabove no submissions / grievance was
made before the Hon''ble Supreme Court with respect to the demand of
property tax which is now made and infact the Hon''ble Supreme Court
has not reserved any liberty in favour of the Gujarat cases permitting the
respective cellular operators / telecommunication service providers to
agitate the issue with respect to the demand of property tax and the
quantum thereof, as is made with respect to the cellular operators in the
Bombay cases. In the case of cellular operators in the Bombay cases, in
the operative portion, the Hon''ble Supreme Court has specifically
observed that so far as cellular operators in Bombay cases are concerned,
it will be open for them to agitate the issue with regard to the
retrospective operation of the assessment / demand of tax and the
quantum thereof before the appropriate Forum, if so advised. No such
liberty has been reserved in favour of cellular operators in the Gujarat
cases. Therefore, once the Hon''ble Supreme Court has allowed the
appeals preferred by the Corporations and has quashed and set aside the
judgment and order passed by the Division Bench of this Court
upholding vires of section 145A of the GPMC Act and consequently
upholding the demand of property tax on Mobile Towers. Thereafter, it
will not be open for the petitioners to again agitate the issue with
respect to the demand of property tax on Mobile Towers.
11. 1 Even otherwise on merits also, for the reasons stated hereinbelow it cannot be said that the impugned demand of property tax on Mobile Towers as per the relevant taxation rules applicable to land and building is in any case illegal and/or contrary to the provisions of the Statute and/or law.
11. 2 The respective Corporations / Nagar Palikas have raised the demand of property tax on the Mobile Towers treating the same as land and building and applying the relevant taxation rules applicable to the land and building. However, it is the case on behalf of the respective petitioners - cellular operators that though the Hon''ble Supreme Court has held the "Mobile Towers" as "building and land", the same is for the purpose of Entry No.49 of List II of the VIIth Schedule to the Constitution of India only and while considering the constitutional validity of section 145A of the GPMC Act only and the Hon''ble Supreme Court has not treated or considered the "Mobile Tower" as "building" as defined under the provisions of the GPMC Act and therefore, it is the case on behalf of the respective cellular operators / telecommunication service providers that the impugned demand of property tax on "Mobile Towers" treating the same as "building" is bad in law and illegal and/or without authority under the law inasmuch as the State Government has not prescribed the maximum rate of tax on Mobile Towers as per section 145A of the GPMC Act. The aforesaid has no substance. There cannot be any two meanings, one for constitutional validity and another for the relevant Statute / Act. Once the "Mobile Towers" are treated as "building and land" by the Hon''ble Supreme Court while upholding section 145A of the GPMC Act and having held that the "Mobile Towers" are "building and land" and therefore, the same shall fall in Entry 49 of List II of VIIth Schedule to the Constitution of India and therefore, the State Government is competent to impose the property tax on Mobile Towers, for all purpose the Mobile Towers are to be considered as building and land. The submission on behalf of the respective petitioners / cellular operators that for the purpose of Entry 49 of List II of VIIth Schedule to the Constitution of India, the Mobile Towers can be treated as building and land as held by the Hon''ble Supreme Court, however the same cannot be treated and/or considered as building and land under the provisions of the GPMC Act is concerned, the same cannot be accepted. Once the Hon''ble Supreme Court in the case of very cellular operators and while considering the very provisions of the GPMC Act more particularly section 145A of the GPMC Act has held and/or treated the Mobile Towers as building and land more particularly building for all purpose under the GPMC Act, the same are required to be treated and/or considered as building and land more particularly the building. Under the circumstances, the impugned demand of property tax on the Mobile Towers as per the relevant Taxation Rules applicable to buildings and land / building cannot be said to be without authority under the law and/or illegal as sought to be contended on behalf of the respective petitioners. At this stage it is required to be noted that the Hon''ble Supreme Court has considered and held "Mobile Towers" as "building and lands" even after considering the definition of "building" in the GPMC Act. In para 31 of the decision in Civil Appeal No.5630 - 5363/2013, the Hon''ble Supreme Court has specifically observed that if the definition of "land and building" contained in the GPMC Act is to be understood, Mobile Tower is certainly a building. At this stage it is required to be noted that in the said decision the Hon''ble Supreme Court has also taken a note of the fact of regulatory powers of the Corporations, Municipalities and Panchayat in the matter of installation, erection and operation of the "Mobile Towers" even before the specific incorporation of the Mobile Towers in the Gujarat Act by 2011 amendment and such control under the Bombay Act at all points of time and thereafter has observed that the aforesaid would be a valuable input to accord a reasonable extension of such power and control by understanding the power of taxation on "Mobile Towers" to be vested in the State Legislature under Entry 49 of List II of the VIIth Schedule to the Constitution of India. Under the circumstances, the "Mobile Towers" are to be treated as "building" / "land" for all purpose and therefore, the Corporations are justified in demanding the tax on "Mobile Towers" treating the same as building and land, and under the Taxation Rules read with relevant provisions of the GPMC Act applicable to the land and building and applying the factors mentioned in the Taxation Rules read with section 141AA of the GPMC Act.
11. 3 Even otherwise even considering the definition of the "building" as contained in section 2(5) of the GPMC Act, it is very wide.
As per subsection
(5) of section 2, "building" includes a house, outhouse,
stable, shed, hut and other enclosure or structure whether of
masonry, bricks, wood, mud, metal or any other material whatever,
whether used as a human dwelling or otherwise, and also includes
verandahs, fixed platforms, plinths.....and the like. It is true that "Mobile
Tower" is separately defined under Section 2(34AA) of the GPMC Act.
However, it is required to be noted that "Mobile Tower" is separately
required to be defined in view of the amendment in the year 2011 by
which the Mobile Towers are "included" and sections 127 and 145A of
the GPMC Act is amended. However, still considering the term
"building" defined under Section 2(5) of the GPMC Act, still the Mobile
Towers can be said to be the "building". As such as observed
hereinabove, in the case of very cellular operators and while considering
the provisions of the GPMC Act and sections 145A of the GPMC Act, the
Hon''ble Supreme Court has specifically observed and held "Mobile
Towers" as "building".
11. 4 While considering the submissions made by the learned
Counsel appearing for respective parties, the relevant provisions of the
GPMC Act are required to be referred to and the reference of which have
been made by the learned Counsel appearing for respective parties while
making submissions on the demand of "property tax on Mobile Towers"
treating the same as "land and building".
"Sec.2(5). "building" includes a house, outhouse,
stable, shed,
hut and other enclosure or structure whether of masonry, bricks,
wood, mud, metal or any other material whatever, whether used as a
human dwelling or otherwise, and also includes verandahs, fixed
platforms, plinths, doorsteps, walls including compound walls and
fencing and the like;
Sec.2(30) "land" includes land which is being built upon or is
built upon or covered with water, benefits to arise out of land, things
attached to the earth or permanently fastened to anything attached to
the earth and rights created by legislative enactment over any street;
Sec.2(34AA) "Mobile Tower" means a temporary or permanent
structure, equipment or instrument erected or installed on land or
upon any part of the building or premises for providing
telecommunication services.
Sec.2(49). "property tax" means a tax on buildings and lands in
the city;
Sec.2(54) "rateable value" means the value of any building or land
fixed whether with reference to any given promises or otherwise, in
accordance with the provisions of this Act and the rules for the
purpose of assessment to property taxes
2(1A) .....
Sec.99. Fixing of rates of taxes
The Corporation shall, on or before the twentieth day of February,
after considering the Standing Committee''s proposals in this behalf,
determine, subject to the limitations and conditions prescribed in
Chapter XI, the rates at which municipal taxes referred to in subsection
(1) of section 127 shall be levied in the next ensuing official
year and the rates at and the extent to which any of taxes referred to
in subsection (2) of the said section which the Corporation decides to
impose shall be levied in the next ensuing official year.
Sec.127. Taxes to be imposed under this Act.
(1) For the purposes of
this Act, the Corporation shall impose the following taxes, namely:(
a) property taxes ;
(b) a tax on vehicles, boats and animals :
Provided that in the case of a local area constituted to be a City
under subsection (2) of section 3, until the expiry of a period of two
years from the appointed day or of such further period not exceeding
two years as the State Government at the request of the Corporation
for such City may, by notification in the Official Gazette, specify, the
provisions of this section shall have effect as if there had been
substituted for the words "the Corporation shall impose" the words
"the Corporation may impose".
2(1A) Notwithstanding anything contained in the proviso to subPage
section (1), in the case of the Municipal Corporation of the City of
Rajkot, for a period of two years commencing on the 19th November,
1975, the provisions of subsection
(1) shall have effect, and shall be
deemed to have had effect, as if with effect on and from the 19th
November, 1975 there had been substituted for the words "the
Corporation shall impose" the words "the Corporation may impose" in
the said subsection
(1).
(2) In addition to the taxes specified in subsection
(1) the
Corporation may for the purposes of this Act and subject to the
provisions thereof impose any of the following taxes, namely:*
* * * * *
(b) Subject to and in accordance with the provisions of the
Gujarat State Tax on Professions, Trades, Callings and
Employments Act, 1976 (President''s Act No.11 of 1976)
and the rules made thereunder, a tax on professions,
trades, callings and employments;
(c) a tax on dogs;
(d) a theatre tax ;
(e) a toll on animals and vehicles,4* * * * * entering the City,
(f) any other tax 6(not being a tax on professions, trades,
callings and employment)8or a tax on payments for
admission to any entertainment which the 8State
Legislature has power under the9Constitution to impose
in the10State.
(2A) Notwithstanding anything contained in subsection
(1) or subsection
(2), no tax or toll shall be levied on motor vehicles save as
provided in section 20 of the Bombay Motor Vehicles Tax Act 1958,
(Bom. LXV of 1958).
(3) The municipal taxes shall be assessed and levied in accordance
with the provisions of this Act and the rules.
(4) Nothing in this section shall authorize the imposition of any tax
which the 8State Legislature has no power to impose in the
10State under the 9Constitution.
Sec.129. Property taxes of what to consist and at what rate
leviable:For
the, purposes of subsection
(1) of section 127 property
taxes shall comprise the following taxes which shall, subject to the
exceptions, limitations and conditions hereinafter provided, be levied
on buildings and lands in the City:(a) a water tax at such percentage of their rateable value as the
Corporation shall deem reasonable, for providing a water
supply for the city:
Provided that the Corporation shall, with the previous sanction of the
State Government, fix the minimum amount of such tax to be levied
and may fix different minima for different classes of properties:Provided
further that the minimum amount of such tax to be levied
shall
(i) in respect of any one separate holding of land or of any one
building (not being premises used exclusively for residential purpose)
or of any one portion of a building which is let as a separate holding
and which is not used exclusively for residential purpose, be not less
than five rupees per mensem for any official year commencing on the
first day of April 1993;
(ii) in respect of any premises used exclusively for residential
purpose, be not less than three rupees per mensem for any official
year commencing on the first day of April 1993;
(b) a conservancy tax at such percentage of their rateable value
as will in the opinion of the Corporation suffice to provide for
the collection, removal and disposal, by municipal agency, of
all excrementitious and polluted matter from privies, urinals
and cesspools
and for efficiently maintaining and repairing
the municipal drains constructed or used for the reception or
conveyance of such matters:
Provided that corporation shall, with the previous sanction of the
State Government fix the minimum amount of such tax to be levied
and may fix different minima for different classes of properties;
Provided further that the minimum amount of such tax to be levied in
respect of any one separate holding of land or of any one building or
of any one portion of a building which is let as a separate holding
shall be not less than two rupees per mensem for any official year
commencing on the first day of April 1993 and that the amount of
such tax to be levied in respect of any hotel, club, industrial premises
or other large premises may be specially fixed under section 137:
Provided also that while determining the rate at such tax under
Section 99 or 150, the Corporation may determine different rates for
different classes of properties;
(c) a general tax of not less than twelve per cent. 5 but not
more than thirty per cent. of their rateable value, which
may be levied, if the Corporation so determines on a
graduated scale;
* * * * * * * * * *
(d) betterment charges leviable under Chapter XVI.
Sec.141AA : Property taxes of what to consist and at what rate
leviable
For the purposes of subsec.
(1) of Sec. 127, property taxes shall
comprise the following taxes which shall, subject to exceptions,
limitations and conditions hereinafter provided, be levied on
buildings and lands in the City:(a) a water tax at such percentage of the amount of general tax
levied under Sec. 141B
as the Corporation shall deem
reasonable, for providing water supply for the City:
Provided that the Corporation shall, with the previous sanction of the
State Government, fix the minimum amount of such tax to be levied
and may fix different minima for different classes of properties:
Provided further that the minimum amount of such tax to be levied
shall,i.
in respect of any one separate holding of land or of any one
building (not being premises used exclusively for residential
purpose) or of any one portion of a building which is let as a
separate
ii. in respect of any premises used exclusively for residential
purpose, be not less than three rupees per mensem for any
official year;
(b) a conservancy and sewerage tax at such percentage of the
amount of general tax levied under Sec. 141B
as well in the
opinion of the Corporation suffice to provide for the
collection, removal and disposal of all excrementitious and
polluted matters from privies, urinals and cesspools and for
efficiently maintaining and repairing the municipal drains
constructed or used for the reception or conveyance of such
matters:
Provided that the Corporation shall, with the previous sanction of the
State Government, fix the minimum amount of such tax to be levied
and may fix different minima for different classes of properties:
Provided further that the minimum amount of such tax to be levied in
respect of any one separate holding of land or of any one building or
of any one portion of a building which is let as a separate holding
shall be not less than two rupees per mensem for any official year and
that the amount of such tax to be levied in respect of any hotel, club,
industrial premises or other large premises may be specially fixed
under Sec. 137:
Provided also that while determining the rate of such tax under Sec.
99 or 150, the Corporation may determine different rates for different
classes of properties;
(c) a general tax which may be levied in accordance with the
provisions of Sec. 141B,
if the Corporation so determines on
a graduated scale;
(d) betterment charges leviable under Chapter XVI.
Explanation.i.
Where any portion of a building or a land is liable to a higher
rate of the general tax, such portion shall be deemed to be a
separate property for the purpose of municipal taxation.The
water tax for providing water supply for the City and the
conservancy tax for the collection, removal and disposal of all
excrementitious and polluted matters from privies, urinals and
cesspools
and for efficiently maintaining and repairing the
municipal drains may be levied and collected jointly as ''water
and sewerage charges'' at the rate based on the carpet area and
the type of the property.
Sec.141B : General tax at what rate leviable
(1) For the purpose of clause (c) of Sec. 141AA,
general tax",
property tax shall, subject to such exceptions and conditions
hereinafter provided, be levied annually on building and lands in the
city at such rate per square meter of the carpet area of building and
of the area of lands (hereinafter to as "the rate of tax) as the
corporation may determine.
(2) For the purpose of levy of tax on buildings in the city under subsection
(1)
(a) the buildings be classified into residential buildings and buildings
other than residential; and
(b) the corporation may determine one rate of tax for residential
buildings and other rate of tax for building other than residential;
Provided that it shall be lawful for the corporation to determine for
residential buildings, the carpet area of which does not exceed forty
square metres, such rate of tax as is lower than the rate of tax
determined for residential buildings generally under this subsection.
(3) The rate of tax determined under subsection
(1) read with subsection
(2) shall not(
a) in respect of residential buildings, be less then ten rupees per
square metre of carpet area and more than forty rupees per square
metre, such rate of tax as is lower than the rate of tax determined for
residential buildings generally under this subsection.
(b) in respect of buildings other than residential, be not less than
twenty rupees per square metre of carpet area and more than eighty
rupees per square metre of carpet area.
(4) The Corporation may, subject to rules, increase or decrease or
neither increase nor decrease the rate of tax determined under subsection
(1) read with subsection
(2) and (3),,
(a) in the case of residential buildings, having regard to the
following factors, namely:,
(i) in market value of the land in the area of the city in which
the buildings are situate
(ii) the length of the time of the existence of the buildings .
(iii) the type of the buildings, and
(iv) whether the buildings are occupied by owners or tenants,
(b) in the case of buildings other than residential, having regard
to the following factors, namely:(
i) The market value of the land in the area of the city in which
the buildings are situate,
(ii) the length of the time of the existence of the buildings,
(iii) the purpose for which the buildings are used, and
(iv) whether the buildings are occupied by owners or tenants.
(5) In lieu of the general tax" leviable under subsection
(1) read with
subsection
(2) and (3), there shall be levied annually on,(
a) residential huts, and
(b) residential tenements in a Chawl, each such tenement having
carpet area not exceeding twenty five square metres,
Such amount of tax as the Corporation may determine:
Provided that the amount so determined shall not be less than such
amount as the State Government may, by notification in the official
Gazette, specify.
Sec.145A. Tax on Mobile Towers.(1) A tax at the rates not
exceeding those prescribed by order in writing by the State
Government in this behalf from time to time shall be levied on Mobile
Towers from the person engaged in providing telecommunication
services through such Mobile Towers.
(2) The Corporation shall from year to year, in accordance
with section 99, determine the rates at which the tax shall be levied.
11. 5 The Taxation Rules are provided in Chapter VIII which are
framed in exercise of powers under Section 454 of the BPMC/ GPMC
Act. The Special Taxation Rules are amended by Taxation Rules
(Amendment)2001
under the provision of Section 454 of the GPMC Act
and had come into force from 1st April 2001. Under the said Taxation
Rules (Amendement) 2001 after Rule 8, Rule 8A, 8B, 8C, 8D and 8E are
added and the Rule 8A is titled as increase or decrease of rate of
property tax having regard to the factors specified in subsection
(4) of
Section 141(B). Rule 8A to 8D which are relevant for the purpose of
present petitions area as under:
Increase or Decrease of Rate of Property tax having regard
to Factors specified in subsection
(4) of Section 141B.
8A.
(1)The rate of tax determined for the residential buildings
under sub section (1) read with sub section (2) & (3) of section
141 B (hereinafter referred to as the specified rate) shall be
increased or decreased or neither increased nor decreased
according to sub rules (2), (3), (4) and (5).
(2).Location Factor
The specified rate shall be increased or decreased having regard
to the class of the area in which the residential buildings are
situate, as follows, namely :(
a) The specified rate shall be increased by multiplying it by
1.60 in respect of the buildings situate in the area classified as
A;
(b)The specified rate shall be increased by multiplying it by
1.10 in respect of the buildings situate in the area classified as
B;
(c)The specified rate shall be decreased by multiplying it by
0.90 in respect of the buildings situate in the area classified as
C;
(d)The specified rate shall be decreased by multiplying it by
0.60 in respect of the buildings situate in the area classified as
D.
Provided that The Municipal Corporation may increase the
multiplying factor shown in (a) to (d) above not exceeding
overall limit of 40% of the factor value indicated there in.
(3).Age Factor
The specified rate shall be decreased or neither be increased nor
be decreased having regard to the length of the time of the
existence of the residential building as follows, namely :(
a) The specified rate shall be neither increased nor decreased
in respect of the buildings, the length of the time of the
existence of which does not exceed ten years,
(b) The specified rate shall be decreased by multiplying it
(I)by 0.85 in respect of the buildings, the length of the time of
the existence of which, exceeds ten years but does not exceed
twenty years.
(ii)by 0.70 in respect of the buildings, the length of the time of
the existence of which, exceeds twenty years but does not exceed
thirty years,
(iii) by 0.60 in respect of the buildings, the length of the time
of the existence of which exceeds thirty years but does not
exceed forty years,
(iv)by 0.50 in respect of the buildings, the length of the time of
the existence of which exceeds forty years.
Provided that The Municipal Corporation may increase the
multiplying factor shown in (a) to (b) (I), (ii), (iii)& (iv)
above not exceeding the overall limit of 40% of the factor value
indicated there in.
(4)Type of building Factor
The specified rate shall be increased or decreased or neither be
increased nor be decreased having regard to the type of the
residential buildings as follows, namely :(
a) The specified rate shall be increased by multiplying it by it
1.50 in respect of the buildings which are independent
bungalows.
(b) The specified rate shall be neither increased nor decreased
in respect of the buildings, which are either row houses or
tenements.
(c)The specified rate shall be decreased by multiplying it :(
I)by 0.70 in respect of the buildings which are flats;
(ii)by 0.70 in respect of the buildings which are situate in pol
or on village site land;
(iii)by 0.50 in respect of the buildings situate in the chawls,
consisting of tenements (dwelling units) each having carpet
area exceeding twentyfive
square metres.
Provided that The Municipal Corporation may increase the
multiplying factor shown in (a) to (c) (I), (ii), & (iii) above
not exceeding the overall limit of 40% of the factor value
indicated there in.
(5) Occupancy Factor
The specified rate shall be increased or neither be increased nor
be decreased having regard to the occupancy of the residential
buildings by owners or tenants as follows, namely :(
a) The specified rate shall be neither increased nor decreased
in respect of the buildings which are occupied by owners
(b) The specified rate shall be increased by multiplying it by
2.0 in respect of the buildings, which are occupied by tenants.
"Provided that The Municipal Corporation may increase the
multiplying factor shown in (a) & (b) above not exceeding the
overall limit of 40% of the factor value indicated there in.
(6)The ultimate rate of tax to be levied in respect of a building
shall be derived by multiplying the specified rate by such
number as is obtained by multiplying each number relating to
increases or decreases referred to sub rules (2), (3), (4) and
(5) and relevant to the building.
(7)The ultimate amount of tax to be levied in respect of a
building shall be determined by multiplying the carpet area of
the building by the ultimate rate of tax derived as per sub rule
(6) above.
Provided that the amount of tax determined under sub rule(7)
above shall not be less then such amount as the Corporation
may, from time to time, determine, provided further that the
amount so determined shall not be less then the amount the
state government may, by notification in official Gazette,
specify under sub section (5) of section 141 B of the Act.
(8)In lieu of property tax leviable under sub rule (7) an
amount of tax as the Corporation may determine from time to
time shall be levied annually on(
a) Residential huts
(b) Residential tenements (dwelling units) in a chawl, each
such tenement having carpet area not exceeding 25 sq. metres.
Provided that the amount so determined shall not be less than
the amount, the state government may, by notification in
official Gazette, specify under the provision of sub section (5)
141 B of the Act.
Explanation: For
the purpose of levy of tax under this rule where an addition
is made to an existing building where by the carpet area of that
building is increased, such addition shall be treated as a
separate building and the length of its existence shall be
computed from the year in which the addition is made.
Provided that if any minor additions/alterations are made on
the same floor of the building which results in the increase of
carpet area not exceeding 10 % of the carpet area of the
building, such addition shall not be treated as a separate
building and the area of such additional construction shall be
added in the carpet area of the building on record prior to such
addition.
Illustration I.
Assuming that the specified rate of tax is Rs. Ten per square
metre and there is a residential building having carpet area of
fifty square metres and it
" falls in area classified as B under sub rule (2) of Rule 8A,
" is of 25 years age
" is a flat
" is occupied by tenant
the ultimate amount of the property tax payable will be
determined as under based on sub rule (2)to( 7).
F O R M U L A
Ultimate amount of property tax payable =
carpet area of the residential building x specified rate of tax x
(location Factor as applicable x age Factor as applicable x type
of building Factor as applicable x occupancy Factory as
applicable)
Factors applicable to the building:
Carpet area of
residential
building
Specified Rate
of Tax.
Location
Factor
Location
factor
Age factor Type of
building
Factor
Occupation
Factor
50 sq mtr Rs.10 1.10 0.70 0.70 2
Calculations:
Ultimate amount of Property tax of the flat = 50 sq.mtr X Rs.10
X (1.10 x 0.70 x 0.70 x 2) = 50 x 10 x 1.078 = Rs. 539
If the same building is occupied by landlord the ultimate amount
of tax will be Rs. 269.50 but the person liable to pay tax will be
required to pay the minimum amount of tax as may be
determined by the corporation under the proviso of sub rule 7 of
Rule 8A.
ILLUSTRATION II
Assuming that the specified rate of tax is Rs. Ten per square
metre and there are four different types of residential properties
viz. R1, R2, R3 and R4 having carpet area of 50 sq.metres.
The ultimate amount of property tax payable will be worked out
as under:R
1 R 2 R 3 R 4
Location
Factor A:
1.60 Location
Factor A
1.60 Location
Factor A
1.10 Location
Factor A
1.10
Age under 10
years
1.0 Age under 10
years
1.0 Age under 25
years
0.70 Age under 25 years 0.70
Bungalow 1.5 Bungalow 1.5 Flats 0.7 Flats 0.7
Owner 1.0 Tenant 2.0 Owner 1.0 Tenant 2.0
Specified rate 10 Specified rate 10 Specified rate 10 Specified rate 10
Ultimate rate
of tax
19.2 Ultimate rate of
tax
38.4 Ultimate rate
of tax
5.39 Ultimate rate of tax 10.78
Area 50
sq.m
Area 50 sq.m Area 50 sq.m Area 50 sq.m
Ultimate
amount of
tax payable
960 Ultimate amount
of tax payable
1920 Ultimate
amount of tax
payable
270* Ultimate amount of
tax payable
540
If this amount happens to be less than the minimum amount of
property tax the corporation may determine under the proviso of
SubRule
7, the minimum amount of tax so determined shall be
payable.
8B. Increase or Decrease of Rate of Property Tax determined for
the buildings other than residential.
(1)The rate of tax determined for the buildings other than
residential, under subsection
(1) read with subsection
(2) &
(3) of section 141B (hereinafter in this rule referred to as the
designated rate) shall be increased or decreased or neither be
increased nor be decreased according to subrules
(2), (3), (4)
and (5).
(2)Location Factor :
The designated rate shall be increased or decreased having
regard to the class of the area in which buildings other than
residential are situate, as follows, namely :(
a) The designated rate shall be increased by multiplying it by
1.60 in respect of the buildings situate in the area classified as I;
(b) The designated rate shall be increased by multiplying it by
1.10 in respect of the buildings situate in the area classified as II;
(c)The designated rate shall be decreased by multiplying it by
0.9 in respect of the buildings situate in the area classified as III;
(d). The designated rate shall be decreased by multiplying it by
0.60 in respect of the buildings situate in the area classified as
IV.
Provided that The Municipal Corporation may increase the
multiplying factor shown in (a) to (d) above not exceeding the
overall limit of 40% of the factor value indicated there in.
(3)Age Factor
The designated rate shall be decreased or neither be increased
nor be decreased having regard to the length of the time of the
existence of the buildings other than residential as follows,
namely :(
a) The designated rate shall be neither increased nor decreased
in respect of the buildings, the length of the time of the existence
of which does not exceed ten years
(b)The designated rate shall be decreased by multiplying it
(I)by 0.85 in respect of the buildings, the length of the time of
the existence of which, exceeds ten years but does not exceeding
twenty years.
(ii)by 0.70 in respect of the buildings, the length of the time of
the existence of which, exceeds twenty years but does not exceed
thirty years,
(iii)by 0.60 in respect of the buildings, the length of the time of
the existence of which exceeds thirty years but does not exceed
forty years,
(iv)by 0.50 in respect of the buildings, the length of the time of
the existence of which exceeds forty years.
Provided that The Municipal Corporation may increase the
multiplying factor shown in (a) to (b) (I), (ii), (iii) & (iv) above
not exceeding the overall limit of 40% of the factor value
indicated there in.
(4)Use Factor
The designated rate shall be increased or neither be increased
nor be decreased or decreased having regard to the purpose for
which the buildings other than residential are used, as follows,
namely: (
a) The designated rate shall be increased by multiplying it
(I) by 7.0 in respect of the buildings used as under :Bank,
Dispensary, Hospital, Clinic, Maternity home, Laboratory,
Central Government office, State Government office, Local bodies
office, Post office, Commercial and / or industrial office, Oil
companies office, Offices of Corporations, Tuition classes, Typing
institute, godowns and warehouses of the properties falling in
the above categories Commercial properties and those buildings
which do not fall within any other subclause
of this clause.
(ii)by 6.0 in respect of the buildings used as under :Shop,
Hotel, Restaurant, Entertainment Places, Open air theatre,
Petrol pump, Service station, Cinema, 8 Shop, Hotel, Restaurant,
Entertainment
Places etc. Club house, Gymkhana, Clubs mess, Lodging, Lodging
and Boarding, Party plots (except community halls), Dish
antennae, Pager antennae towers, Sign board, hoarding, Mobile
phone towers, godowns and warehouses of the properties falling
in the above categories.
(iii)by 2.0 in respect of the buildings used as under:Electricity
Power House, Electric sub station, Aerated Water Factory,
Bhattha, Brass Works, Brick and ceramic works, Cement
Articles, Clay mfg. Unit, Chemical Factory, Confectionery, Dairy,
Distillery, Foundry, Flour Factory, Iron Factory, Zinc Factory,
Silver ornament Factory, Jaggary manufacturing unit, Leather
manufacturing unit, Lime chakki, Lime bhatthi, Oil extraction,
Paper manufacturing, Plastic Factory, Pottery, Sagol
manufacturing, Soap manufacturing Sugar manufacturing, Tin
Factory, Tobacco Factory, Work shop, Factory SteamGill,
AutoGarage,
Factory A, B, C, D, E, F, Mill, Power loom, Hand loom,
Bleaching, Bone washing, cotton spinning & dyeing, dyeing
bleaching, Dhanadal
Factory, Leather processing, Screen
printing, Sulfur processing, Starch processing, Variyali
processing, Wool processing, Cold storage, Wood pitha,
Bhathiyar khana, Repairing works, Nursery ( flower plants)
Animal market, Cattle stable, Poultry farm, Kennel, Milk cattle
stable, Weigh bridge, Binding press, Printing press, Process
studio, Photo studio, Common effluent treatment plant,
Godowns and Warehouses of the properties falling in the all
above categories. Industrial units and Factories (only for
processing and manufacturing units):
(iv)by 2.0 in respect of the buildings used as under :Educational
and Social Institutions Private Nursery (BalMandir),
Private and Govt. Schools, Private and Govt. Colleges,
University campus, Museum, Community halls, Social institutes
run by public charitable trust (for the welfare of women, old
people, deaf, dumb and blind, physically handicapped, mentally
retarded people) and non grantable schools.
(b) The designated rate shall be neither increased nor decreased
in respect of the buildings used as under :Water
tank, Water pump room, Drainage pumping stations,
Dhobighat, Grantable schools run by Public Charitable Trust,
BoardingLodgingHostels
run by 9T Public Charitable Trust and
Religious Institutions, Dharmashala,
Ashram, Library.
(c)The designated rate shall be decreased by multiplying it by
0.0 in respect of buildings used as under:
Temple, Mosque, Derasar (Jain Temple), Church, Roza, Tombs,
Gurudwara (Sikh Temple), Apasara, Darga, Agiyari, Samadhi,
Graveyard, Kabrastan, Crematorium, Well, Havada, Hamam
Khana (Public Bath), Mattina Akhada, Madrasa, Pathshala,
Free Water Parab, Gandhi AshramSabarmati,
Kocharab
AshramPaldi,
Sardar Ptel Smarak Trust, Lal Darwaja Sardar
Patel Memorial Trust, Shahibaug And Other National Smaraks
"provided that if any commercial activity is being conducted in
any of the above buildings shown in (c)above, the portion of
building used for such purpose shall be assessed according to its
use
"further Provided that The Municipal Corporation may increase
the multiplying factor shown in (a) to (c) above not exceeding
the overall limit of 40% of the factor value indicated there in.
"further Provided that The Commissioner with the prior
approval of Municipal Corporation may change classification of
use as shown in 4 (a) (I to iv), (b), (c) above.
(5) Occupancy Factor
The designated rate shall be neither be increased nor be
decreased or increased having regard to the occupancy of
buildings other than residential as follows, namely :(
a) The designated rate shall be neither increased nor decreased
in respect of the buildings which are occupied by owners
(b) The designated rate shall be increased by vmultiplying it by
2.0 in respect of buildings, which are occupied by tenants.
"Provided that The Municipal Corporation may increase the
multiplying factor shown in (a) to (b) above not exceeding the
overall limit of 40% of the factor value indicated there in.
(6).The ultimate rate of tax to be levied in respect of a building
shall be derived by multiplying the designated rate by such
number as is obtained by multiplying each number relating to
increase or decrease referred to in subrules
(2), (3), (4), and
(5) and relevant to the building.
(7)The ultimate amount of tax to be levied in respect of a
building shall be determined by multiplying the carpet area of
the building by the ultimate rate of tax derived as per sub
rule(6) above.
"Provided that the ultimate amount of tax determined under sub
rule (7) above shall not be less then such amount as the
Corporation may, from time to time, determine, provided further
that the amount so determined shall not be less then such
amount the state government may, by notification in official
gazette, specify under sub rule (5) of section 141 B
Illustration 1 :Assuming that the designated rate of tax is Rs.
22/per
square metre and a building which is of other than
residential type is having a carpet area of TwentyFive
square
metres and it:"
falls in area classified as II under sub rule (2)of Rule 8B.
" is of 25 years age
" is a shop
" is occupied by a tenant
The ultimate amount of property tax payable will be determined
according to the following formula based on subrule
(2) to (7)
8B.
F O R M U L A
Ultimate amount of property tax payable =
carpet area of the building other than residential x designated
rate of tax x (location Factor as applicable x age Factor as
applicable x use of building Factor as applicable x occupancy
Factor as applicable) Factors applicable to the building:
Carpet area of
residential
building
Specified
Rate of Tax.
Location
Factor
Location
factor
Age factor Type of
building
Factor
Occupation
Factor
25 sq mtr Rs.22 1.10 0.70 0.70 1.0
Calculations: Ultimate amount of property tax of the shop = 25
sq mtr X Rs. 22 X (1.10 x 0.70 x 6.0 x1) = 25 x 22 x4.62 =
Rs.2541/If
the same building is occupied by tenant the ultimate amount
of tax will be Rs. 5082/Illustration
II.
Assuming that the designated rate of tax is Rs. 22 per square
metre and there are four buildings viz. NR1, NR2, NR3, and
NR4 which are buildings of other than residential type having
carpet area as shown in the table below, then the ultimate
amount of tax will be worked out as under:
R 1 R 2 R 3 R 4
Location
Factor I:
1.60 Location
Factor I
1.60 Location
Factor C
1.10 Location
Factor D
1.10
Age
under 8
years
1.0 Age under
8 years
1.0 Age under 25
years
0.70 Age under
25 years
0.60
Shop 6.0 Shop 6.0 Fatory 2.0 Hostel 1.0
Owner 1.0 Tenant 2.0 Owner 1.0 Owner 1.0
Designate
d rate Rs.
22 Designated
rate Rs.
22 Designated
rate Rs.
22 Designated
rate Rs.
22
Ultimate
rate of
tax
211.2 Ultimate
rate of tax
422.4 Ultimate rate
of tax
34 Ultimate
rate of tax
14.52
Area sq.m 25 Area sq.m 25 Area 100 sq.m Area 100 sq.m
Ultimate
amount
of tax
payable
5280 Ultimate
amount of
tax payable
10560 Ultimate
amount of
tax payable
3400 Ultimate
amount of
tax payable
1452
8C. Property Tax on lands.
The property tax for a commercial / industrial units shall be
levied at following rates:
(I)100% for buildings with R.C.C. Roof,
(ii)85% for buildings having Pacca Walls but nonRCC
roof,
(iii)75% for buildings having enclosed sheds with corrugated
or iron or cement sheets with nonRCC
roof.
(iv)65% for nonenclosed
buildings or sheds I.e.open shed
with roof
(v)30% for open land used for commercial or industrial
purpose of the ultimate rate referred to in sub rule (6) of rule
8B at which property tax would have been leviable on a
building other than residential building as if
(1)Such building were situate on such land.
(2)Such building had the same carpet area as the area of the
land,
(3)Such buildings were used for a commercial / industrial
purpose similar to the one for which the land is used.
(4)The time for its existence had commenced from the date
which the land was first used for any commercial/industrial
purpose, and
(5)Such building were occupied by the person using land as
tenant or owner.
8D. Power of Commissioner to classify areas of City.
(1)For the purpose of subrule
(2) of rule 8A the
Commissioner shall classify the area of the city in which
residential buildings are situate into four classes namely A, B,
C and D having regard to the market value of the lands in
the area. The classification so made shall be subject to
revision once in every four years.
(2)For the purpose of subrule(2) of rule 8B, the
Commissioner shall classify the area of the city in which
buildings other than residential buildings are situate into
four classes namely I, II, III and IV having regard to the
market value of lands in the area. The classification so made
shall be subject to revision once in every four years
(3)The market value of lands in the area referred to in subrule
(1) and (2) above shall be determined by the
Commissioner having regard to such Factors as deemed fit by
him.
(4)For the purpose of sub rule (3) of Rule 8A and sub rule
(3) of Rule 8B the Commissioner shall determine the length
of the time of existence of residential building and other than
residential buildings based on the information available with
him or as may be obtained by him from the sources as he
deems appropriate.
(5)For the purpose of sub rule (4) of Rule 8 B the
Commissioner shall have the power to decide which property
would fall in category mentioned in sub rule 4 (a) (I) (ii)
(iii) and (iv) and sub rule 4 (b) and (c).
(6)In cases where cables/pipe lines are laid under ground/
over ground for commercial purposes and it is difficult to
determine land value for the purpose of classification under
sub rule (2) of rule 8 B the Commissioner shall determine the
average land value for the purpose of determining the
location Factor taking into consideration the factors he
deems appropriate.
Explanation:For
the purpose of this sub rule the open land used for laying
cables under ground / over ground, laying pipe lines under
ground / over ground and for erecting any structure such as
HT towers, poll mounted transformers for electricity,
hoarding, dish antennae, mobile telephone/paging towers
etc. on any land or building shall be construed as use of open
land for commercial purpose and shall be taxed accordingly.
The Commissioner shall have power to determine the area of
land used/ occupied under sub rule (6).
(7)The classification done by the Commissioner under subrule
(1) & (2) above and decision taken by him under sub
rule (4), (5) & 6 above shall be final and shall not be
questioned in any court or before any authority.
11.6 Section 99 of the GPMC Act provides for fixing of rates of
taxes. As per Section 99 of the Act, the Corporation is required to
determine after considering the Standing Committees proposals and
subject to the limitations and conditions prescribed in Chapter XI and
levy the tax at such rates. Under Section 127 of the Act, the Corporation
shall impose the property tax either under Section 129 or under Section
141 AA and a tax on vehicles, boats and animals; and even on Mobile
Towers. As per subsection
(3) of Section 127 of the Act, the Municipal
tax shall be assessed and levied in accordance with the provisions of the
Act and Rules. As per Section 129 of the Act, for the purposes of subsection
(1) of Section 127, the property tax shall comprise the water tax;
conservancy tax and general tax. Section 129 of the Act also provides for
property tax on what to consist and at what rate leviable. Section 139 of
the Act provides for primary responsibility for property taxes. Section
141AA of the Act is with respect to the property tax on what to consist
and at what rate leviable. As per subsection
(c) of Section 141 AA for
the purpose of subsection
(1) of Section 127 a general tax which may
be levied in accordance with the provision of Section 141 B, the
Corporation so determines on a graduated scale. As per Section 141 B of
the Act, for the purpose of clause (c) of Section 141 AA, a general tax
shall subject to exceptions, limitations and conditions provided, be
levied annually on buildings and lands in the city at such rate per square
metre of the carpet areas of buildings and of the areas of lands as the
Corporation may determine. As per subsection
(2) of Section 141 B of
the Act for the purpose of levy of tax on the building in the city under
subsection
(1), the buildings may be classified into residential buildings
and buildings other than residential and the Corporation may determine
one rate of tax for residential building and other rate of tax other than
residential. It also further provides that it shall be lawful for the
Corporation to determine for the residential buildings, the carpet area
which does not exceed forty square metres, such rate of tax as is lower
than the rate of tax determined for residential buildings generally under
the subsection.
As per subsection
(3) of Section 141 B the rate of tax
determine under subsection
(1) r/w subsection
(2) shall not in respect
of residential building, be less than ten rupees per square meter of
carpet area and more than forty rupees per square meter of carpet area
and in respect of buildings other than residential, be not less than
twenty rupees per square meter of carpet area and more than eighty
rupees per square meter of carpet area. Subsection
(4) of Section 141 B
of the Act provides the guidelines / factors to be considered, subject to
the Rules, for increase or decrease of the rate of tax with respect to the
residential building and the building other than residential. Sections 99,
129, 141 AA and 141 B of the GPMC Act
11. 7 Thus, considering the scheme of the GPMC Act more particularly considering the aforesaid provisions the Corporation is authorized to impose the property tax either under Section 129 or under Section 141A of the GPMC Act and the tax on Mobile Towers. Under the circumstances, the Corporation is authorized to demand the property tax on the Mobile Towers as per the applicable rates and the factors applicable to the buildings and as per the relevant Taxation Rules applicable to the buildings referred to hereinabove. At this stage it is required to be noted that even in the relevant Taxation Rules provided under Chapter VIII which are framed in exercise of powers under Section 454 of the GPMC Act, there is a specific reference to the Mobile Towers. If the interest of the legislation was not to apply the relevant Taxation Rules with respect to the Mobile Towers, in the relevant Taxation Rules, there would not have been mention of Mobile Towers.
11. 8 As observed hereinabove the main contention on behalf of the respective cellular operators is that as the State Government has not prescribed by order in writing the maximum rate of tax as mentioned in section 145A of the GPMC Act and therefore, unless and until the maximum rates are prescribed by the State Government, the Corporations are not authorized to levy the tax on the Mobile Towers. However, it is required to be noted that while levying the tax on buildings the maximum and minimum rates are prescribed. As observed hereinabove section 127 of the GPMC Act authorizes the Corporation to levy the tax on Mobile Towers also. Subsection (2) of section 145A also provides that the Corporation shall from year to year in accordance with section 99 determine the rate at which the tax shall be levied. The similar provision is with respect to the tax on land and building etc. The relevant provisions of GPMC Act more particularly sections 99, 127, 129, 141AA and 145A are required to be read harmoniously and conjointly. If the aforesaid provisions are read together harmoniously and conjointly and as observed hereinabove the Mobile Towers are "building", it cannot be said that the demand of property tax / tax on the Mobile Towers is without authority under the law and/or illegal.
11. 9 It is submitted by Shri Trivedi, learned Counsel appearing on behalf of the Ahmedabad Municipal Corporation that as such the property tax is levied on the land on which the Mobile Towers are erected and therefore, relying upon the decision of the Hon''ble Supreme Court in the case of Goodricke Group Ltd. (Supra), it is the case on behalf of the Corporation that the same is permissible. In the case before the Hon''ble Supreme Court, cess was levied on tea estate at prescribed rate for each kilogram of green tea leaves produced in such estate and to that the Hon''ble Supreme Court has observed that it amounts to tax on land measured by yield by quantum of tea leaves produced in tea estate and hence, covered by Entry 49 of List II of VIIth Schedule, which cannot be said to be a levy on the produce of land. In para 20 the Hon''ble Supreme Court has observed and held as under: "20. It is thus clear from the aforesaid decisions that merely because a tax on land or building is imposed with reference to its income or yield, it does not cease to be a tax on land or building. The income or yield of the land/building is taken merely as a measure of the tax; it does not alter the nature or character of the levy. It still remains a lax on land or building. There is no set pattern of levy of tax on lands and buildings indeed there can be no such standarisation. No one can say that a tax under a particular entry must be levied only in a particular manner, which may have been adopted hitherto. The Legislature is free to adopt such method of levy as it chooses and so long as the character of levy remains the same, i.e.. within the four corners of the particular entry, no objection can be taken to the method adopted. In the cases before us, the cess is no doubt calculated on the basis of the yield for every kilogram of tea leaves produced in a tea estate, a particular cess is levied. But that is wellaccepted mode of levy of tax on land. The tax is upon the land upon the ''tea estate'' which is classified as a separate category, as a separate unit, for the purpose of levy and assessment of the said cess quantified on the basis of the quantum of produce of the tea estate. It cannot be characterised as a tax on production for that reason. As pointed out in Moopil Nair, a tax on land is assessed on the actual or potential productivity of the land sought to be taxed". There cannot be uniform levy unrelated to the quality character or income/ yield of the land. And such levy has been held to be arbitrary and discriminatory. Under the circumstances, the respective Corporations have rightly demanded the property tax on Mobile Towers as per the relevant Taxation Rules applicable to the "building and land".
11. 10 Now, so far as the challenge to the demand of water tax and conservancy tax by the Corporation in some of the petitions is concerned, it is required to be noted that as per section 129 of the GPMC Act, for the purpose of subsection (1) of section 127, the property taxes shall comprise of (1) a water tax and (2) a conservancy tax. Section 129 of the GPMC Act authorizes the Corporation to levy water tax, for providing water supply for the city. It does not depend upon whether a particular person uses the water supplied by the Corporation or not. It also does not depend upon whether for a particular "building" any water is required to be consumed or not. Similar is the provision with respect to conservancy tax. Under the circumstances, the submission on behalf of some of the cellular operators that as for Mobile Towers water is not required and therefore, water tax / conservancy tax is illegal, cannot be accepted. The demand of water tax / conservancy tax is in consonance with the provisions of section 127 read with sections 129 and 141AA of the GPMC Act.
11. 11 Now, so far as the submission on behalf of the cellular operators that property tax leviable shall not be less than 12% but not more than 30% of the rateable value is concerned, it is required to be noted that there is an amendment in section 127 of the GPMC Act itself. As per section 127 of the GPMC Act, property taxes shall be either under Section 129 or under Section 141AA of the GPMC Act. After insertion of section 141AA of the GPMC Act, tax is levied / demanded on the basis of the carpet area. Under the circumstances, the impugned demand of tax on the Mobile Towers applying the taxation rules framed under Section 454 of the GPMC Act applicable to the buildings and lands etc. is absolutely just and proper.
12. In view of the above and for the reasons stated above, it cannot be said that the impugned demand of property tax on Mobile Towers is without authority under the law and therefore, in violation of Article 243X of the Constitution of India as sought to be contended on behalf of the respective cellular operators / telecommunication service providers.
12. 1 In view of the above and for the reasons stated above, all these petitions fail and the same deserve to be dismissed and are, accordingly, dismissed. Notice discharged in each of the petitions. Adinterim relief, if any, stands vacated forthwith.
