Gujarat High Court
Indus Towers Ltd vs State Of Gujarat & on 18 April, 2017
Bench: M.R. Shah, B.N. Karia
C/SCA/6668/2017 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 6668 of 2017
For Approval and Signature:
HONOURABLE MR.JUSTICE M.R. SHAH Sd/
and
HONOURABLE MR.JUSTICE B.N. KARIA Sd/
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1 Whether Reporters of Local Papers may be allowed to see No
the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law as No
to the interpretation of the Constitution of India or any
order made thereunder ?
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INDUS TOWERS LTD.....Petitioner(s)
Versus
STATE OF GUJARAT & 11....Respondent(s)
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Appearance:
MR SHALIN MEHTA, SENIOR ADVOCATE with MS VIDHI J BHATT, ADVOCATE for Petitioner
ADVANCE COPY SERVED TO GP/PP for the Respondent(s) No. 1
MR PK JANI, ADDITIONAL ADVOCATE GENERAL with MS MANISHA LAVKUMAR,
GOVERNMENT PLEADER for Respondent - State of Gujarat
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CORAM: HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 18/04/2017
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] By way of this petition under Article 226 of the Constitution of India, petitioner - Telecommunication Service Provider has prayed for an appropriate writ, direction and order to declare sections 99(1) and 99(1)(xiva) of the Gujarat Municipalities Act, 1963 (hereinafter referred Page 1 of 39 HC-NIC Page 1 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT to as "Municipalities Act") as unconstitutional and utlra vires to Articles 243 X and 265 of the Constitution of India. The petitioner has also challenged the levy of property tax on Mobile Towers under the provisions of the Municipalities Act.
[2.0] At the outset it is required to be noted that this is second round of litigation and attempt on the part of the petitioner - Telecommunication Service Provider to avoid payment of property tax on Mobile Towers. Earlier the Telecommunication Service Provider like the petitioner raised the question of levy of property tax on Mobile Towers and also challenged the vires of section 145A of the Gujarat Provincial Municipal Corporation Act, 1949 (hereinafter referred to as "GPMC Act") as well as the relevant provisions of the Municipalities Act (which is under challenge in the present petition) before this Court. The respective Telecommunication Service Providers like the petitioner succeeded before this Court and the Division Bench of this Court declared the relevant provisions of the GPMC Act as well as Municipalities Act levying the property tax on Mobile Towers as ultra vires to the Constitution of India more particularly legislative Entry 49 of List II and held that the Mobile Towers cannot be termed as "building" and therefore, to levy the property 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 the case of Ahmedabad Municipal Corporation vs. GTL Infrastructure Ltd. & Ors. (Civil Appeal No.5360 - 5363 of 2013), the Hon'ble Supreme Court has allowed the said appeals and has quashed and set aside the decision of this Court and has held "Mobile Towers" as "land and building" and therefore, it is held that the State is having the competence to enact the law to levy tax on Mobile Towers.
At this stage it is required to be noted that during the pendency Page 2 of 39 HC-NIC Page 2 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT and final disposal of 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 / Panchayats deposit the amount already collected, before the Hon'ble Supreme Court. The Hon'ble Supreme Court also also clarified that respective Corporations / Panchayats may determine the tax on Mobile Towers and raise the demand on 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 demand was kept in abeyance. That thereafter the Hon'ble Supreme Court set aside the order passed by the Division Bench of this Court and held against the respective Telecommunication Service Provider and upheld the vires of the relevant provisions of the GPMC Act as well as Municipalities Act, when the respective Municipalities have raised the demand of the property tax on the Mobile Towers for the past period as well as current period, at that stage again the petitioner - Telecommunication Service Provider has preferred the present Special Civil Application again challenging the demand of property tax on Mobile Towers, which is the subject matter of present petition.
[3.0] Shri Shalin Mehta, learned Senior Advocate has appeared on behalf of the petitioner. Shri P.K. Jani, learned Additional Advocate General has appeared with Ms. Manisha Lavkumar, learned Government Pleader on behalf of the State of Gujarat.
[4.0] We have heard the learned Counsel appearing on behalf of the Page 3 of 39 HC-NIC Page 3 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT respective parties at length.
[5.0] Shri Mehta, learned Counsel appearing on behalf of the petitioner has submitted that it is true that the Hon'ble Supreme Court has upheld the relevant provisions of the Municipalities Act levying the property tax on Mobile Towers. 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 while upholding the levy of property tax on "Mobile Towers" and declaring the relevant provisions of the GPMC Act and Municipalities Act constitutionally valid, the Hon'ble Supreme Court has not specifically observed that "Mobile Towers" shall be treated and/or considered as "land and building" for the purpose of levy of property tax under the Municipalities Act. It is submitted that only for the purpose of considering the legislative competence of the State to impose tax on Mobile Towers, "Mobile Towers" are held to be "land and building"
within the meaning of Entry 49 of List II of 7th Schedule to the Constitution of India.
[5.1] It is further submitted by Shri Mehta, learned Senior Advocate appearing on behalf of the petitioner has submitted that even otherwise section 99 of the Municipalities Act is ultra vires Articles 243X and 265 of the Constitution of India.
[5.2] It is vehemently submitted by Shri Mehta, learned Senior Advocate appearing on behalf of the petitioner that section 99 of the Municipalities Act is ultra vires Article 243X of the Constitution of India because Article 243X authorizes the Municipality to levy tax in accordance with such procedure and subject to such limits as may be specified in the law made by the State Legislature. It is submitted that the word "law" in Article 243X means primary legislation. It is submitted Page 4 of 39 HC-NIC Page 4 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT that however section 99 of the Municipalities Act authorizes the State Government to make an order (special or general) to fix the minimum and maximum rates of tax. It is submitted that in other words, Article 243X mandates that the limit of tax be prescribed by the State Legislature. It is submitted that however section 99 of the Municipalities Act allows the State Government to make an order to set the limits of tax. It is submitted that thus viewed, section 99 is inconsistent and incompatible with Article 243X of the Constitution of India. Relying upon the decision of the Hon'ble Supreme Court in the case of Mathuram Agrawal vs. State of Madhya Pradesh reported in (1999) 8 SCC 667, it is submitted that as held by the Hon'ble Supreme Court in the said decision, where the Statute does not set out the right of tax, the same is unconstitutional.
[5.3] It is further submitted by Shri Mehta, learned Senior Advocate that Article 243X requires the limits of a tax to be fixed by exercise of law making power. It is submitted that Section 99 allows the limits of a tax to be fixed by exercise of executive power. In other words, Article 243X requires section 99 to set the maximum and minimum rates of tax. However, section 99 allows the State Government to set the maximum and minimum rates of tax. It is submitted that clearly section 99 is in tension with Article 243X of the Constitution of India.
[5.4] It is further submitted that the word "limits" in Article 243X obviously refers to maximum and minimum rates of tax. It is submitted that the mention of the words "minimum and maximum rates of a tax"
in Section 99 is a clear pointer that the "limits" in Article 243X refers to monetary limits. It is submitted that to the extent Section 99 authorizes the State Government to make an order for fixing the minimum and maximum rates of a tax, without any guidance and control, it suffers Page 5 of 39 HC-NIC Page 5 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT from the vice of excessive delegation. It is submitted that section 99 cannot abnegate the State Legislature's power to set the limits of a tax and permit delegation of that power to the State Government. In support of his above submissions, he has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Delhi Race Club Ltd. vs. Union of India and Ors. reported in (2012) 8 SCC 680.
[5.5] It is further submitted that under section 99 the competence of a Municipality to levy tax is subject to State Government's general or special order fixing the minimum and maximum rates of a tax. It is submitted that without such order, the levy of tax by Municipality would fall foul of Section 99. It is submitted that in the present case, there is no such order of the State Government fixing the minimum and maximum rates of a tax.
[5.6] It is further submitted by Shri Mehta, learned Senior Advocate that Section 99 do not authorize a Municipality to levy tax on Mobile Towers, given the presence of State Government's order fixing the minimum and maximum rates of tax, without rules being made in that behalf. It is submitted that here, no rules are made by the concerned Municipality under Section 101 for prescribing the manner of levying tax. It is submitted that without rules framed under section 101 and an order of the State Government fixing the minimum and maximum rates of a tax, no tax under Section 99 can be levied.
[5.7] It is further submitted by Shri Mehta, learned Senior Advocate that Article 265 says that no tax shall be levied or collected except by authority of law. It is submitted that for levy and collection of tax, determination of rate of tax is prerequisite. It is submitted that the rate has to be determined by law. It is further submitted that law only mean primary legislation like Statute. It is submitted that in the present case Page 6 of 39 HC-NIC Page 6 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT the tax rate is not prescribed in the primary legislation (Section 99). It is submitted that tax rate cannot be determined by delegated legislation. It is submitted that even where tax is determined by delegated legislation, the primary legislation must provide guidance to the delegatee for determining the tax rate. It is submitted that in the present case, the levy of tax is based on neither of the above and so ultra vires Article 265 of the Constitution of India.
[5.8] It is further submitted by Shri Mehta, learned Senior Advocate appearing on behalf of the petitioner that illegal levy of tax made by the Municipality under Section 99 is an infringement of the petitioner's fundamental right to do business under Article 19(1)(g) of the Constitution of India.
[5.9] It is further submitted that illegal levy of tax made by the Municipality under Section 99 is arbitrary and violative of Article 14 of the Constitution of India. The petitioner has also challenged the impugned demand of property tax and the impugned bills also on the ground that retrospective levy of tax by the respective Municipalities for unknown years of the past is in violation of relevant Taxation Rules. However, as there can be different factors with respect to different respective Municipalities for which the individual case qua each Municipality is required to be considered, we relegate the petitioner to challenge the respective bills / demand before appropriate Forum / Appellate Authority / Court and the present petition be restricted to challenge to the constitutional validity of section 99 of the Municipalities Act to levy the property tax on Mobile Towers only and as and when such bills are challenged before the appropriate Authority / Court / Forum, the same be considered in accordance with law and on its own merits.
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C/SCA/6668/2017 JUDGMENT
[6.0] Present petition is vehemently opposed by the Shri Prakash K. Jani, learned Additional Advocate General appearing with Ms. Manisha Lavkumar, learned Government Pleader appearing on behalf of the State.
Shri Jani, learned Additional Advocate General has vehemently submitted that as such the issue involved in the present petition is squarely covered against the petitioner - Telecommunication Service Providers in light of the decision of the Division Bench of this Court in the case of BLA Coke Pvt. Ltd. vs. State of Gujarat dated 13.06.2014 rendered in Special Civil Application No.284/2013 and other allied petitions. It is submitted that in the said petition vires of sections 99 and 104 of the Municipalities Act were challenged and it was submitted that the same is ultra vires to Article 243X of the Constitution of India. rendered in Special Civil Application Nos.4541/2017 and 5322/2017. It is submitted that the Division Bench has negatived the same and has upheld the constitutional validity of sections 99(1) and 99(1)(ia) of the Municipalities Act. It is further submitted that as such the issued involved in the present petition is also squarely covered against the petitioner - Telecommunication Service Providers in light of the decisions of the Division Bench of this Court in Special Civil Application Nos.4541/2017 and 5322/2017. It is submitted that by the aforesaid decision the Division Bench of this Court has upheld the constitutional validity of the relevant provisions of the GPMC Act and also upheld the levy of property tax on Mobile Towers.
[6.1] It is further submitted by Shri Jani, learned Additional Advocate General that even otherwise when the Hon'ble Supreme Court has considered and held the Mobile Towers as "land and building" and has upheld the constitutional validity of the relevant provisions of the GPMC Act as well as Municipalities Act to levy the property tax on Mobile Page 8 of 39 HC-NIC Page 8 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT Towers, thereafter it is not now open for the petitioner to again contend that the "Mobile Towers" cannot be termed as "land and building" and it will not be open for the petitioner - Telecommunication Service Providers to challenge the levy of property tax on Mobile Towers. It is submitted that as such this is another attempt on the part of the Telecommunication Service Providers to avoid the demand of property tax on Mobile Towers, despite the decision of the Hon'ble Supreme Court in the case of GTL Infrastructure Ltd. & Ors. (Supra).
[6.2] It is further submitted that even otherwise the levy of property tax on Mobile Towers and the impugned demand of property tax on Mobile Towers is after following due procedure as required under the provisions of the Municipalities Act as well as the relevant Taxation Rules. It is submitted that section 99 of the Municipalities Act earlier authorized the Municipality to levy the tax on buildings and the lands based on Annual Letting Value of building or land or both. It is submitted that section 99(1) came to be amended vide Gujarat Municipalities (Amendment) Act, 2007 whereby the words "Annual Letting Value or the Capital Value or percentage of capital value" were replaced with the words "carpet area". It is submitted that Amendment Act also inserted section 99(A) to the Act permitting the Municipality to levy property tax at such rate per sq. meter on the carpet area of building or of land as Municipality may determine having regard to the factors as the State Government may prescribe by Rules. It is submitted that the State Government, Urban Development and Urban Housing Department has framed the Rules called Gujarat Municipality Property Tax Rules, 2007. It is submitted that Taxation Rules provide factors like location factor, age factor, occupancy factor, type of construction factor and prescribed formula based on the aforesaid factors for determining the property tax. It is submitted that under section 99 of the Municipalities Act, the Page 9 of 39 HC-NIC Page 9 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT Municipality has the powers to impose tax subject to any general or specific orders which the State Government may make in this behalf and subject to the provisions of sections 101 and 102 of the Municipalities Act. It is submitted that section 101 prescribes procedure which is preliminary to imposing the tax and which is mandatorily required to be followed prior to imposition of the tax. That the Rule 5(3) of the Taxation Rules lays down that if the rate of tax is fixed keeping in view the minimum and maximum rate fixed by the Government of Gujarat under Section 104 of the Act, prior permission of the Director of Municipalities shall not be necessary. That Rule 5(3) thus dispenses with the requirement of following procedure under Sections 101 and 102 prior to imposition of tax by a Municipality. On 01/04/2008 the Urban Development and Urban Housing Department issued a Notification bearing No. KV38 of 2008 NPL/1007/1454/M fixing minimum and maximum rate of tax for different class of Municipalities for residential buildings and for buildings other than residential buildings. It is submitted that therefore it cannot be said that either no Taxation Rules are framed and/or no guidelines is prescribed and/or no minimum or maximum rate of tax has been prescribed. It is submitted that therefore it cannot be said that section 99 of the Municipalities Act and the relevant Taxation Rules are ultra vires to Article 243X and 265 of the Constitution of India as sought to be contended on behalf of the petitioner.
[6.3] It is further submitted that even the aforesaid issue is also squarely covered against the petitioner in light of the decision of the Division Bench of this Court in the case of Adani Gas Limited vs. Ahmedabad Municipal Corporation rendered in Special Civil Application No.11459/2012. It is submitted that in the aforesaid decision a similar challenge was made with respect to the relevant provisions of the GPMC Page 10 of 39 HC-NIC Page 10 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT Act and it was contended that section 141B of the GPMC Act to levy the general property tax is unconstitutional and ultra vires to Article 243X of the Constitution of India and the same has been negatived by the Division Bench of this Court in the said decision - Adani Gas Limited (Supra).
Making above submissions it is requested to dismiss the present petition and uphold the constitutional validity of section 99 of the Municipalities Act.
[8.0] Heard learned Counsel appearing for respective parties at length.
At the outset it is required to be noted that the issue whether on the "Mobile Towers" the property tax is leviable or not, treating the "Mobile Towers" as "land and building" is squarely covered by the decision dated 07.03.2017 of the Division Bench of this Court in the case of ATC Telecom Tower Corporation Private Limited & Anr. vs. State of Gujarat & Anr. (Special Civil Application No.2693/2017 and other allied matters) as well as the the subsequent decisions in the case of Vodafone Mobile Services Limited vs. State of Gujarat & Anr. (Special Civil Application No.4541/2017) and in the case of Reliance Jio Inforcomm Limited vs. State of Gujarat & Anr. (Special Civil Application No.5322/2017), by which similar challenge to the levy of property tax on Mobile Towers has been negatived by this Court and considering the decision of the Hon'ble Supreme Court rendered in Civil Appeal Nos.5360 - 5363/2013 by which the Hon'ble Supreme Court has upheld the relevant provisions of the GPMC Act, Municipalities Act and Gujarat Panchayat Act to levy the property tax on "Mobile Towers" by holding that the "Mobile Towers" are "buildings". Under the circumstances, when once the Hon'ble Supreme Court has upheld the validity of levy of property tax on "Mobile Towers" treating / considering it as "buildings" and has upheld the relevant provisions of the Municipalities Act also by Page 11 of 39 HC-NIC Page 11 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT which the property tax is levied on "Mobile Towers", thereafter it is not open for the petitioner again now to contend that the property tax on "Mobile Towers" is not leviable.
[8.1] Even otherwise even considering the definition of "Mobile Towers"
contained in Section 2(12B) of the Municipalities Act, "Mobile Tower"
can be said to be "Building". At this stage definition of "Mobile Tower"
as mentioned in the Municipalities Act is required to be referred to and considered. Section 2(12A) of Municipalities Act defines "Mobile Tower", which reads as under:
"Section 2(12B). "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."
[8.2] Now, so far as challenge to the constitutional validity of section 99(1) and 99(1)(xiva) of the Municipalities Act levying the property tax on Mobile Towers is concerned, at the outset it is required to be noted that the said issue is covered against the petitioner in view of the decision of the Division Bench of this Court in the case of BLA Coke Pvt. Ltd. vs. State of Gujarat Thro Secretary & Ors. rendered in Special Civil Application No.284/2013 and other allied matters. In the aforesaid decision, constitutional validity of sections 99 and 104 of the Municipalities Act and the Gujarat Municipality Properties Tax Rules, 2007 and the Notification No.KV 38 of 2008 NPL/1007/1454/M dated 01.04.2008 issued by the Urban Development and Urban Housing Department, Government of Gujarat were challenged and the same has been negatived by the Division Bench of this Court. While upholding the constitutional validity of the provisions and the Notification, the Division Bench in paras 6 to 8 has observed and held as under:
Page 12 of 39HC-NIC Page 12 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT "6.0 Heard learned advocates appearing on behalf of respective parties at length.
At the outset it is required to be noted that in all these petitions the respective petitioners have prayed for an appropriate writ, direction and order to declare sections 99A and 104 of the Act as ultra vires. The petitioners have also challenged the Taxation Rules, the notification dated 01/04/2008 and the levy of property tax by the respondent No.3 Okha Nagarpalika on the petitioners w.e.f. 01/04/2008.
Thus, as such basically the respective petitioners have prayed to declare sections 99A and 104 of the Act as ultra vires. As recorded hereinabove, it is the case on behalf of the petitioners that section 99A of the Act is ultra vires as it delegates uncontrolled powers to the State Government to levy property tax. It is the case on behalf of the petitioners that the determination of factors for being basis for assessment of property tax can only be done by legislative Act and leaving such determination to the State Government by an administrative Act results in excessive delegation of powers to the State Government and is violative of Article 243X of the Constitution of India under which it is only the legislature of a State that can authorize the municipality to levy, collect an appropriate tax in accordance with such procedure and subject to such limits as may be specified in law. It is the case on behalf of the petitioners that section 99A leaves it to the executive to determine the factors and it does not give any guidelines or directions to the State Government on the basis of which the basis can be prescribed. Submitting accordingly it is submitted that section 99A is ultra vires. Similarly, requesting to declare section 104 of the Act as ultra vires, it is the case on behalf of the petitioners that section 104 of the Act authorizes the State Government to empower any municipality to levy any tax or to increase or reduce the amount of rate of tax levied under section 99 of the Act within such maximum and minimum limits either as to amount or the rate as may be specified in such notification, which is violative of Article 243X of the Constitution of India, which requires the legislature of a State to be the maximum and minimum limits. It is the case on behalf of the petitioners that section 104 confers uncontrolled powers to the State Government to fix such limit which is required to be done by legislative Act under the Constitution and therefore, section 104 of the Act is ultra vires. The notification dated 01/04/2008 is also requested to be held ultra vires on the aforesaid ground.
6.1 On the other hand it is the case on behalf of the State that prior to amendment in the Act, the property tax was levied on buildings and lands based on the annual letting value or capital value or percentage of capital value of buildings, which has resulted in different matters of assessment of tax under the erstwhile provisions of section 99 of the Act in different municipalities, leading to increase in litigation, nontransparency in the assessment and low rate of recovery of tax effecting the revenue of the Page 13 of 39 HC-NIC Page 13 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT municipalities. Therefore, it was felt to introduce single method of assessment of tax on buildings and lands in the municipalities as a result whereof the State Government introduced the levy of tax on the basis of the carpet area of the buildings and the area of lands and therefore, the Act came to be amended in section 99(1)(i) of the Act as well as inserting section 99A of the Act which has become effective from 01/04/2008. It is the case on behalf of the State that section 99A of the Act, which is inserted in Gujarat Municipalities (Amended) Act, 2007 is a charging section which is enacted in aid of section 99(1)(i) of the Act for levying tax on buildings and lands. It is the case on behalf of the respondent State that considering the provisions contained in sections 101 to 111 of the Act along with section 99A, it becomes abundantly clear that the State Legislature has laid down detailed procedure and guidance as regards the machinery for fixation of rate of tax per sq. meter of the carpet area of buildings and of the areas of lands. It is also the case on behalf of the respondent State that section 104 of the Act has no bearing on sections 99 to 103 of the Act and it seeks to provide for an alternate procedure and it enables that State Government to empower any municipality to levy tax, within such maximum and minimum limits as may be specified in the notification and the municipality so empowered, notwithstanding any resolution or rules under section 101, is entitled to pass a resolution at a general meeting to levy such tax, which comes into effect upon publication of the resolution and the date of its coming into force.
In the backdrop of the above mentioned submissions, the challenge to sections 99A and 104 of the Act is required to be considered.
7.0 Before considering the rival submissions on merits, the relevant provisions of the Gujarat Municipalities Act, 1963 for imposition of taxes prior to the Gujarat Municipalities (Amendment) Act, 2007 and subsequent to the Gujarat Municipalities (Amendment) Act, 2007 are required to be referred to, which are as under:
Prior to Amendment, 2007
99. (1) Subject to any general or special orders which the State Government may make in this behalf and to the provisions of sections 101 and 102, a municipality may impose for the purposes of this Act any of the following taxes, namely:
(i) a tax on building or lands situate within the municipal borough to be based on the annual letting value or the capital value or pecentage of capital value of the buildings or lands or both;
After Amendment, 2007
99. (1) Subject to any general or special orders which the State Page 14 of 39 HC-NIC Page 14 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT Government may make in this behalf and to the provisions of sections 101 and 102, a municipality may impose for the purposes of this Act any of the following taxes, namely:
(i) a tax on building or lands situate within the municipal borough to be 1 based on [carpet area] of the buildings or lands or both;
99A. (1) For the purposes of clause (i) of subsection(1) of section 99, the tax shall, subject to such exceptions, limitations and conditions hereinafter provided, be levied annually on the buildings or lands situate in the municipal borough area at such rate per square meter of the carpet area of buildings and of the area of lands (hereinafter to as the rate of tax) as the municipality may determine having regard to the factors as the State Government may president by rules.
(2) For the purpose of levy of tax on buildings or lands situate within the municipal borough under subsection (1),
(a) the buildings may be classified into residential buildings and buildings other than the residential buildings; and
(b) the municipality may determine one rate of tax for residential buildings and the other than rate of tax for buildings other than the residential buildings:
Provided that it shall be lawful for the municipality to determine for residential buildings, the carpet area of which does not exceed forty square meters, such rate of tax as is lower than the rate of tax determined for residential buildings generally:
Provided further that the rates of tax per square meter of carpet area shall be decided by municipality with the approval of the Director of Municipalities.
(3) In lieu of the tax leviable under subsection (1) read with sub section (2), there shall be levied annually on,
(a) residential hunts, and
(b) residential tenements in a chawl, each such tenement having carpet area not exceeding twentyfive square meters, such amount of tax as the Municipality 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.
104. (1) The State Government may, by notification in the Official Gazette, empower any municipality to levy tax or to increase or reduce the amount or rate of any tax levied under section 99 within such maximum and minimum limits either as to the amount or the rate as may be specified in such notification.
(2) Notwithstanding any resolution or rule under section 101 specifying the amount or rate at which such tax is leviable, any municipality empowered under subsection (1) may, by a resolution Page 15 of 39 HC-NIC Page 15 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT passed at a general meeting decide to levy such tax or increase or reduce the amount of rate at which such tax is leviable.
(3) When a municipality has by a resolution passed under subsection (2) decided to levy any tax or to increase or reduce the amount or rate at which any tax is leviable, the municipality shall publish in the municipal borough the resolution together with notice specifying a date, which shall not be less than one month from the date of publication of such notice, from which the tax shall be levied or the amount or rate at which any tax is leviable shall be increased or reduced. The tax shall thereupon be levied or, as the case may be, the amount or rate thereof shall be increased or reduced from the date specified in such notice.
Thus, after amending section 99(1)(i) of the Act, the State Government has provided the levy of tax on the basis of the carpet area of the buildings and the area of lands. Simultaneously, section 99A of the Act is also inserted and it provides that for the purpose of levy of tax on buildings or lands situate within the municipal borough to be based on the carpet area of the building or lands or both, the tax be levied annually on the buildings or lands situate in the municipality area at such rate per sq. meter of the carpet area of the buildings and of the area of the lands as the municipality may determine having regard to the factors and the State Government may prescribe by Rules. Section 99A provides that for the purpose of levy of tax under subsection (1) of section 99A of the Act, the buildings may be classified into residential buildings and buildings other than residential buildings. That section 99A also further provides that the municipality may determine the rate of tax per sq. meter of the carpet area having regard to the factors as the State Government may prescribe by Rules. In the present case the State Government has framed the Rules viz. Gujarat Municipalities Property Tax Rules, 2007 providing various factors to be considered while determining the rate of tax such as allocation of the property, age of the property, use of the property i.e. residential and nonresidential. Not only that even the notification dated 01/04/2008 has been issued by the State Government prescribing / fixing the minimum and maximum rate of tax and the notification has been issued in exercise of powers conferred by subsection (1) of section 104 read with section 99A of the Act. The relevant provisions of the Taxation Rules, 2007 are as under:
Publication of Rules for implementation of levy of property tax based on area/carpet area in municipal areas.
Government of Gujarat, Department of Urban Development and Urban Housing, Resolution No.MUNI10071454M Sachivalaya, Gandhinagar.
Date : 11 JUN 2007
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READ : Section 99(1)(i) of the Gujarat Municipalities Act, 1963.
PREAMBLE :
Section 99 (1) (i) of the Gujarat Municipalities Act, 1963 confers powers on the municipalities to levy carpet area based property tax on different types of properties situated in different municipal areas of the State. As provided in this Section, the municipalities can charge the property tax according to the rules and regulations as may be prescribed by the State Government. The State Government has made above provisions in the Act by way of a Bill introduced before Eleventh Gujarat Legislative Assembly in its Eleventh Session. Accordingly, State Government has to frame rules for levy of property tax and made it available to all the municipalities.
Municipalities of the State have been categorized as A, B, C and D classes depending on their population. All these Municipalities are distinct and different from each other from the geographic area and development point of view. There is no uniformity or similarity in respect of property tax collected by these municipalities in urban areas. As per the provisions prevalent prior to above amendment made in the Municipalities Act, assessment of property tax was being made on the basis of Annual Rent Value of the property, capital value of the property or proportionate of value of the property. With a view to avoid this situation and to do away with the disputes arising as a result of assessment and overcome dissatisfaction prevailing amongst the tax payers as also with a view to ensure transparency and honesty in tax method, the State Government has introduced provision that the property tax shall be determined on the basis of area of property only as per rules framed by the State Government, by way of amendment in section 99(1) of the Gujarat Municipalities Act, 1963. In this regard, the rules which were to be prescribed by the State Government so as to enable different municipalities to assess property tax as per rules, are hereby published as under : RESOLUTION :
Rules pertaining to section 99 A(1) for implementation of levy of property tax in municipal areas on the basis of area/carpet area under section 99(1)(1) of the Gujarat Municipalities Act, 1963.
1. These rules may be called as The Gujarat Municipalities Property Tax Rules, 2007.
2. These rules shall be effective from the date as may be determined by the Government of Gujarat by way of publication of Gazette for making effective Act 13 of 2007.
3. These Rules shall be applicable to all the municipalities in the State constituted under provisions of the Gujarat Municipalities Page 17 of 39 HC-NIC Page 17 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT Act, 1963.
4. Definition :
Carpet Area : Carpet area means floor area of the building excluding the area on which internal or external walls are erected.
Chawl : Chawl (chaali) means a building consisting two or more residential units with or without common cleaning and other amenities and which has been so declared as such by the Director of Municipalities through a notification in Gazette.
5. Specified Rates :
1. The Municipality may determine tariff for the tax per square meter for residential building situated in its area and shall determine another rate per square meters for the buildings other than residential buildings with prior approval of the Director of Municipalities, and the rate so determined shall be increased at the rate of 10% per square meter every two years.
However, in respect of the residential units having carpet area less than 40 sq.mtrs., the municipality may specify the rate lower than the rate so specified for ordinary residential buildings.
2. Slum dwellings and residential tenaments in Chawls having less than 25 sq.mtrs. carpet area may be charged with the annual tax at the rate so specified by municipality.
However, amount of tax so specified shall not be less than the amount so specified by the State Government by way of Gazette Notification.
Explanation : In case of increase in carpet area of any existing building, such expansion shall be treated as a separate unit and period of its existence to be considered from the year in which it is expanded.
3. While determining such rates, minimum and maximum rates of taxes, if any, specified by the State Government under section 104 of the Gujarat Municipalities Act, 1963 shall be taken into consideration and in such cases, prior approval from the Director of Municipalities may not be required.
6. Following factors shall be taken into consideration while assessing property tax :
1. Location factor :
The location factor shall include following grades keeping in view development of the area where residential property and the property other than residential use : Page 18 of 39 HC-NIC Page 18 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT Factor 1 (F1) For residential purpose only Based on Location Factor Load A Grade (Prosperous 1.25 Area) B Grade (Medium Area) 1.00 C Grade (Weaker Area) 0.75 For nonresidential purpose only Based on Location Factor Load A Grade (Prosperous 1.50 Area) B Grade (Medium Area) 1.25 C Grade (Weaker Area) 1.00 Explanation :
(a) In respect of location factor of residential purpose building, load factor has been specified keeping in view grade of the area by defining prosperous area as A Grade, medium area as B Grade and weaker area as C Grade.
(b) In respect of location factor of other than residential purpose building, load factor has been specified keeping in view grade of the area by defining prosperous commercial area as A Grade, medium commercial area as B Grade and weaker commercial area as C Grade and there is difference of 0.25 specified in every aspect between load factor of residential and nonresidential areas.
2. Life span of property :
Keeping in view the period of construction of buildings for residential and other than residential purposes, following load factor may be applicable : Factor 2 (F2) Sr. Life factor of property Load No. Page 19 of 39 HC-NIC Page 19 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT
1. Upto 20 years 1.00
2. More than 20 years but less than 40 years 0.75
3. More than 40 years 0.50
3. Factor of occupation of property : Keeping in view the fact whether property situated in municipal area is occupied by owner of such property or by tenant and also taking into consideration the load, specified rate of the property tax may be increased or reduced. The load factor for the same shall be as under : Factor 3 (F3) Occupation of property For residential and nonresidential purpose Factor Load Occupied by owner 1.00 Occupied by tenant 1.25 Explanation : Factor No.3 shall be applicable in case of properties used for residential and nonresidential purposes.
4. Factor of construction of property : Rate of property tax in respect of properties situated in municipal areas shall be determined as under keeping in view nature of construction of the property : Factor 4 (F4) Nature of construction of property Page 20 of 39 HC-NIC Page 20 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT (For residential purpose) Factor Load Independent bungalow 1.25 Tenament / row house 1.00 Flat 0.75 Residential units in streets, urban areas 0.75 Chawl and open plot 0.50 Factor 4 A (F4A) (For nonresidential purpose) Factor Load Banks, petrol pump, godownwarehouses, offices of 4.00 commercial and industrial units, offices of advisors/experts, multipurpose commercial trade center, mobile phone tower and its offices etc., and all other building of such nature which are not included in any other subclause of this clause and as may be so identified by the municipality.
Shop, hotel, restaurant, entertainment halls, cinema 3.00 hall, garage, service station, lodgingboarding, club house, hospital, dispensary, maternity home, any type of laboratory, tuition coaching class, skill center etc. and any other building as may be specified under this category by the municipality from time to time.
Industrial units and factories (Building put to use for only Page 21 of 39 HC-NIC Page 21 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT manufacturing and processing activities) :
Having constructed area upto 1 to 100 sq.mtrs 2.00 Having constructed area of 101 to 250 sq.mtrs. 1.50 Having constructed area of 251 to 500 sq.mtrs. 1.25 Having constructed area of 501 to 1000 sq.mtrs. 1.00 Having constructed area of more than 1001 sq.mtrs. 0.75 Open plot 0.50 Educational and social organizations, 1.00 Government and semigovernment offices, private kindergartenplay centers, privategovernment schools/colleges, community hall, Madressa, and any other buildings of such category as may be so specified by the municipality from time to time.
Trough of water for cattle, bathing and washing 0.75 spots, waterhuts for public, asylum for old and unserviceable animals (panjara pol), Gau Shala, social organisations run by Public Charitable Trusts (such as Women Protection Home, Old Age Home, Deaf and Dumb Hostel, Blind and Handicapped Hostel and Beggars home, charitable dispensaries providing free medical services, libraries etc.) and all other buildings of such nature as may be specified by the municipality from time to time.
Temple, mosque, Jain Temple, Church, Roza, 0.00 Tombs, Gurudwara, Upashray, Dargah, Agiyari, Samadhi, Grave Yard, Crematorium etc. The amount of property tax may be computed by calculating as per following formula on the basis of the above factors and load factors and the tariff of tax fixed per square meter.
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Amount of property tax payable = Area of property (sq.mtrs.)x per sq.mtr. rate x Location Factor1 (F1 or F1A)x Life span of property Factor 2 (F2) x Occupation of Property Factor3 (F3) x Nature of building (Residential and nonresidential purpose) Factor (F4 or F4A).
Example 1 A residential building (flat type) of 75 sq.mtrs. area is situated in prosperous area of any municipality and it is 10 years old and under occupation of the owner himself, • Suppose the rate of property tax is fixed at Rs.5/ per sq.mtrs. = Rs. 5 per sq.mtrs. x 75 sq.mtrs. = 375/ Now, loading it with loading factors as per formula 375 x 1.25 (prosperous area)(F1) x 1 (age of building) (F2) x 1 (occupation) (F3) x 0.75 (type of construction) (F4) = 375 x 1.25 x 1.00 x 1.00 x 0.75 = Rs. 351.56 property tax.
(F1) (F2) (F3) (F4) Example 2 Suppose a building having area of 500 sq.mtrs. is situated in medium commercial area in a municipality, which is being used for the purpose of a bank and construction of the building is 15 years old which has been occupied by bank as tenant, • If rate of property tax is assumed to be Rs.10/ per sq.mtr. 500 sq.mtrs. x 10 = Rs. 5000/ Now, upon loading the factors as per formula 5000 x 1.25 (medium commercial area) (F1) x 1.00 (age factor) (F2) x 1.25 (Occupation) (F3) x 4.00 (nature of construction) (F4) = 5000 x 1.25 x 1.00 x 1.25 x 4.00 = Rs.31250/ property tax (F1) (F2) (F3) (F4) Issued by order and in the name of H.E. Governor of Gujarat.
Sd/ (C.M.Gohil) Under Secretary Department of Urban Development and Urban Housing Thus, from the combine reading of section 99(1)(i) read with section 99A of the Act and the Taxation Rules, 2007, it can be said that the municipality may and subject to any general or special orders which the State Government may make in this behalf impose a tax on buildings or lands situate within the municipal borough to be based on the carpet area of the buildings or the lands or both and while imposing of or levying the tax on buildings or lands situate within the municipal borough to be based on the carpet area of the buildings or lands or both, the Page 23 of 39 HC-NIC Page 23 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT municipality is authorized to levy of tax annually at such rate per sq. meter of the carpet area of the buildings and of the area of the lands as the municipality may determine having regard to the factors as the State Government may prescribe by Rules and for that purpose the buildings may be classified into residential buildings and buildings other than residential buildings and the factors on which the municipality may determine the rate of tax are provided in the Taxation Rules 2007 and even as per the notification dated 01/04/2008, the minimum and maximum rate of tax is also provided. Thus, it can be said that the State legislature has provided guidance as regards the machinery for fixation of rate of tax per sq. meter of the carpet area of buildings and of the areas of lands and it cannot be said that there are no guidance and/or safeguards provided while determining the rate of tax by the concerned municipality.
7.1 The contention on behalf of the petitioners that sections 99A and 104 of the Act does not provide any guidance and/or procedure to be followed by the municipality to impose/levy any tax which were required to be followed under section 101 is concerned, it is required to be noted on introduction of section 99A, the procedure as required under sections 99 to 103 is not required to be followed as section 104 of the Act has no bearing on sections 99 to 103 of the Act and it seeks to provide for an alternate procedure. Section 104 of the Act enables the State Government to empower any municipality to levy tax, within such maximum and minimum limits as may be specified in the notification and the municipality so empowered, notwithstanding any resolution or rules under section 101, is entitled to pass a resolution at a general meeting to levy such tax, which comes into effect upon publication of the resolution and the date of its coming into force. As observed herein above the rate of tax is required to be determined as per section 99A of the Act and considering the factors provided as per the Rules prescribed by the State Government and in the present case the Taxation Rules, 2007.
7.2 It appears that with a view to have uniformity with respect to method of assessment of tax and to avoid the litigation and have transparency in the assessment, section 99A of the Act has been inserted introducing/providing single method of levying tax on buildings or lands in the municipality and/or municipal borough by the State Government on the basis of the carpet area of the buildings and the area of the lands. Thus, section 99A of the Act is a charging section, which is enacted in aid of section 99(1)(i) of the Act for levying tax on buildings and lands and subject to the minimum and maximum tax determined by the State Government and also subject to and/or having regard to the factors as the State Government may prescribe by Rules that in the present case Taxation Rules, 2007. Thus, it cannot be said that section 99A delegates uncontrolled power to the State Government to prescribe factors on the basis of which the municipality is authorized to levy property tax as sought to be contended on behalf of the petitioners. A complete Page 24 of 39 HC-NIC Page 24 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT machinery and guidelines/guidances are provided and neither section 99A nor section 104 of the Act can be said to be ultra vires on the ground that it confers unguided and uncontrolled powers.
7.3 At this stage the decision of the Honble Supreme Court in the case of Gulabchand Bapalal Modi v. Municipal Corporation of Ahmedabad reported in (1971)1 SCC 823 [paras 18 to 22] as well as in the case of Arvinder Singh v. State of Punjab reported in (1979)1 SCC 136 [para 23] are required to be referred to. Paras 18 to 22 of the decision of the Honble Supreme Court in the case of Gulabchand Bapalal Modi (Supra) reads as under:
"18. In The Western India Theatres Ltd. v. Municipal Corporation of the City of Poona, this Court spelt out the policy in the expression "for the purposes of this Act", an expression also used in Section 127. In Pandit Banarsi Das Bhanot v. State of Madhya Pradesh, delegation of power to the executive to determine the details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be levied, the rates at which it is to be charged in respect of different classes of goods and the like, was held not to be unconstitutional on the principle that so long as the legislature retains or has the power of withdrawing or altering the power to tax delegated to a subordinate authority such delegation would be held neither an abdication nor excessive. In Liberty Cinema case, the majority view was that the power to fix the rate of a tax was not of the essence of the legislative power and that such a power could be delegated even to a nonlegislative body. But the decision laid down that when such a power is delegated the legislature must provide guidance for such fixation. The majority held that where rates have not been specified in the statute, the power to fix the rates as might be necessary to meet the needs of the delegate itself affords guidance. The minority view differed from the majority view, in that, according to it the power to fix the rate of tax was an essential legislative function. But, even according to that view, such a power can be delegated provided the delegate is afforded guidance by the legislature laying down the policy and principles in the Act. It however, disagreed with the majority view that the raising of tax co extensive with the needs of the delegate in implementing the purposes of the Act can afford such guidance.
19. The Liberty Cinema case (supra) came for consideration in Devi Das v. State of Punjab, where Subba Rao, C. J., speaking for the Court, said:
"If this decision Liberty Cinema case, (1965) 2 SCR 477 = (AIR 1965 SC 1107) is an authority for the position that the legislature can delegate its power to a statutory authority to levy taxes and fix rates in regard thereto, it is equally an authority for the position Page 25 of 39 HC-NIC Page 25 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT that the said statute to be valid must give a guidance to the said authority for fixing the said rates. . ".
Though he did not agree as a general principle that guidance can always be spelt out from the limitation to fix the rate by the extent of the needs of and the expenses required by the delegate to discharge its statutory functions, the Court did not disapprove Liberty Cinema case, but confined the principle laid down there to the provisions of the calcutta Municipal Act in which the majority had found the requisite guidelines. No such guidance was available in the Sale Tax statute before the Bench deciding Devi Das's case (supra). The position, which emerged from the decisions so far, therefore, was that the power to fix rates can be delegated if the statute doing so contains a policy or principles furnishing guidance to the delegate in exercising such power.
20.In the Municipal Corporation of Delhi .v. Birla Mills, the question as to the limits of delegation of taxing power once more arose. The Delhi Municipal Corporation Act, 1957, like the present Act, entrusted to the Delhi Corporation two kinds of functions, compulsory and optional. In relation to the former, the Act specified the maximum rate of tax the Corporation could raise, but not so in the case of tax relating to or for implementing the optional functions. The controversy was whether the Act contained provisions furnishing guidance to the Corporation in the exercise of the power to tax. After an analysis of the provisions of the Act Wanchoo, C. J., pointed out the following factors which furnished sufficient guidance preventing the delegation becoming invalid
1. that the delegation was to an elected body responsible to the people, including those who pay taxes and to whom the councillors have every four years to turn to for being elected;
2. that the limits of taxation were to be found in the purposes of the Act for the implementation of which alone taxes could be raised and though this factor was not conclusive, it was nonetheless relevant and must be taken into account with other relevant factors;
3. that the impugned S. 150 itself contained a provision which required that the maximum rate fixed by the Corporation should have the approval of the Government;
4. that the Act contained provisions which required adoption of budget estimates by the Corporation annually; and
5. that there was a check by the courts of law where the power of taxation is used unreasonably or in noncompliance or breach of the provisions and objects of the Act.
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21.Referring to Devi Das's case, he pointed out that (1) that case did not disapprove Liberty Cinema case, was concerned with a rules tax statute and not with a statute dealing with bodies with limited purposes, such as local self governing bodies. At page 268 of the report , he observed:
"There is in our opinion a clear distraction between delegation of fixing the rate of tax like sales tax to the State Government and delegation of fixing rates of certain taxes for purposes of local taxation. The needs of the State are unlimited. ... . The result of making delegation of a tax like sales tax to the State Government means a power to fix the tax without any limit even if the needs and purposes of the State are to be taken into account."
Thus, the majority view in this decision, which is binding on us, shows that the mere fact that an Act delegating taxing power refrains from providing a maximum rate does not by itself render the delegation invalid.
22. From the provisions of the present Act, cited earlier it will be seen that though factor (3) of the factors relied on by Wanchoo, C. J., is absent in S. 127, the rest are present. It is impossible to say that when a provision requiring sanction of the Government to the maximum rate fixed by the Corporation is absent, the rest if the factors which exist in the Act lose their efficacy and cease to be guidelines. Furthermore, if the Corporation were to misuse the flexibility of the power given to it in fixing the rates, the State legislature can at any moment withdraw that flexibility by fixing the maximum limit up to which the Corporation can tax. Indeed, the State Legislature has now done so by Section 4 of Gujarat Act, 8 of 1968.In view of the decisions cited above it is not possible for us to agree with counsel's contention that the Act confers on the Corporation such arbitrary and uncontrolled power as to render such conferment an excessive delegation."
Para 23 of the decision of the Honble Supreme Court in the case of Avinder Singh (Supra) is as under:
"23. It is too late in the day to contend that the jurisprudence of delegation of legislative power does not sanction parting with the power to fix the rate of taxation, given indication of the legislative policy with sufficient clarity. In the case of body like a municipality with functions which are limited and the requisite resources also limited, the guideline contained in the expression "for the purposes of the Act" is sufficient, although in the case of the State or Central Government a mere indication that taxation may be raised for the purposes of the State may be giving a carte blanche containing no indicium of policy or purposeful limitation. In a welfare State wallowing in privations, the total financial Page 27 of 39 HC-NIC Page 27 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT needs may take us to astronomical figures. Obviously that will be no guideline and so must be bad in law. Something more precise is necessary; some policy orientation must be particularised. Shri Tarkunde relied on this differentiation in attacking S. 90 (5) of the Act. He argued that had the municipal corporation done the job there would have been some guidance from the section. But when the Government did it, it did not have any such restraint and could, therefore, run berserk. We do not appreciate this contention as we will explain at a later stage. Suffice it to say that flexibility in the form the legislative guidance may take, is to be expected. Wanchoo, C. J. explained [in Municipal Corporation of Delhi case (supra)]:
It will depend upon the circumstances of each statute under consideration: in some case guidance in board general terms may be enough; in other cases more detailed guidance may be necessary. As we are concerned in the present case with the filed of taxation, let us look at the nature of guidance necessary in this field. The guidance may take the form of providing maximum rates of tax up to which a local body may be given the discretion to make its choice, or it may take the form of providing for consultation with the people of the local area and then fixing the rates after such consultation. It may also take the form of subjecting the rate to be fixed by the local body to the approval of Government which acts as a watchdog on the actions of the local body in this matter on behalf of the legislature. There may be other ways in which guidance may be provided. But the purpose of guidance, whatsoever may be the manner thereof, is to see that the local body fixes a reasonable rate of taxation for the local area concerned. So long as the legislature has made provision to achieve that reasonable rates of taxation are fixed by local bodies, whatever may be the method employed for this purpose provided it is effective, it may be said that there is guidance for the purpose of fixation of rates of taxation. The reasonableness of rates may be ensured by fixing a maximum beyond which the local bodies may not go. It may be ensured by providing safeguards laying down the procedure for consulting the wishes of the local inhabitants. It may consist in the supervision by Government of the rate of taxation by local bodies. So long as the law has provided a method by which the local body can be controlled and there is provision to see that reasonable rates are fixed, it can be said that there is guidance in the matter of fixing rates for local taxation. As we have already said there is preeminently a case for delegating the fixation of rates of tax to the local body and so long as the legislature has provided a method for seeing that rates fixed are reasonable, be it in one form or another, it may be said that there is guidance for fixing rates of taxation and the power assigned to the local body for fixing the rates is not uncontrolled and uncanalised. It is on the basis of these principles that we have to consider the Act with which we are concerned.
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In the Municipal Corporation of Delhi case (supra), it was significantly observed:
According to our history also there is a wide area of delegation in the matter of imposition of taxes to local bodies subject to controls and safeguards of various kinds which partake of the nature of guidance in the matter of fixing rates for local taxation. It is in this historical background that we have to examine the provisions of the Act impugned before us.
Both the sides relied on certain important criteria contained in the judgment of Wanchoo, C. J., especially because it is a Bench of seven Judges and the ratio therein laid down has considerable authority and binds us. Dealing with municipal bodies and the nature and content in that Municipal Act, the court observed what is instructive for us in the present case:
This is in our opinion a great check on the elected councillors acting unreasonably and fixing unreasonable rates of taxation. This is a democratic method of bringing to book the elected representatives who act unreasonably in such matters. It is however urged that S. 490 of the Act provides for the supersession of the Corporation in case it is not competent to perform or persistently makes default in the performance of duties imposed upon it by or under the Act or any other law or exceeds or abuses its power. In such a case the elected body may be superseded and all powers and duties conferred and imposed upon the Corporation shall be exercised and performed by such officer or authority as the Central Government may provide in this behalf. It is urged that when this happens the power of taxation goes in the hands of some officer or authority appointed by Government who is not accountable to the local electorate and who may exercise all the powers of taxation conferred on the elected Corporation by the Act ........"
Another guide or control on the limit of taxation is to be found in the purposes of the Act. The Corporation has been assigned certain obligatory functions which it must perform and for which it must find money by taxation. It has also been assigned certain discretionary functions. If it undertakes any of them it must find money. Even though the money that has to be found may be large, it is not, as we have already indicated, unlimited for it must be only for the discharge of functions whether obligatory or optional assigned to the Corporation. The limit to which the Corporation can tax is therefore circumscribed by the need to finance the functions, obligatory or optional which it has to or may undertake to perform. It will be not open to the Corporation by the use of taxing power to collect more than it needs for the functions it performs............."
Another limit and guideline is provided by the necessity of adopting budget estimates each year as laid down in S. 109 of the Act. That section Page 29 of 39 HC-NIC Page 29 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT provides for division of the budget of the Corporation into four parts i.e. general, electricity supply, transport, water and sewage disposal. The budget will show the revenue and expenditure and these must balance so that the limit of taxation cannot exceed the needs of the Corporation as shown in the budget to be prepared under the provisions of the Act. These four budgets are prepared by four Standing Committees of the Corporation and are presented to the Corporation where they are adopted after debate by the elected representatives of the local area. Preparation of budget estimates and their approval by the Corporation is therefore another limit and guideline within which the power of taxation has to be exercised. Even though the needs may be large, we have already indicated that they cannot be unlimited in the case of Corporation, for its functions both obligatory and optional are well defined under the Act. Here again there is a limit to which the taxing power of the Corporation can be exercised in the matter of optional taxes as well, even though there is no maximum fixed as such in the Act."
7.4 Now, so far as reliance placed upon the decision of the Honbnle Supreme Court in the case of Krishna Mohan (Supra) relied upon by the learned counsel appearing on behalf of the petitioners is concerned, considering the facts of the case before the Honble Supreme Court, it appears that the said decision shall not be applicable to the facts of the case on hand and/or with respect to provision of section 99A read with section 104 of the Act. It appears that in the aforesaid decision it was found that there were no guidelines available under the Delhi Municipal Corporation Act, 1957, which could have guided the Commissioner as to which plant and machinery may be considered as part of the land or building for determination of rateable value. It was found that section 116(3) of the said Act was suffering from excessive delegation, empowering the Commissioner to declare any plant or machinery as part of the land or building for determining the rateable value thereof.
Therefore, on conjoint reading of sections 99(1)(i), 99A and 104 of the Act and the procedure which is required to be followed and even the factors to be considered while determining the rate of tax as may be prescribed as per the Rules to be published by the State Government and even the municipality can levy the tax as per the minimum and maximum rate of tax determined by the State Government, it cannot be said that section 99A and/or section 104 of the Act suffers from vice of arbitrariness or it cannot be said that there is excessive delegation of powers as sought to be contended on behalf of the petitioners and/or there is no guidance for determining the rate of tax and therefore, it cannot be said that the aforesaid provisions are ultra vires as contended on behalf of the petitioners.
7.5 Now, so far as the contention on behalf of the petitioners that the Taxation Rules and the notification in question do not deal with the Page 30 of 39 HC-NIC Page 30 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT imposition of tax on lands is concerned, it is required to be noted that section 99(1)(i) of the Act is with respect to tax on buildings or lands situate within the municipal borough to be based on the carpet area of buildings or lands or both; section 99A also speaks about the levy of tax annually on the buildings or lands at such rate per sq. meter of the carpet area of buildings and of the area of the lands as the municipality may determine having regard to the factors as the State Government may prescribe by Rules [in the present case the Taxation Rules, 2007]. Section 99(2) also speaks about the levy of tax on buildings or lands. Even on examining Property Tax Rules minutely, it appears that they do deal with the imposition of tax on lands in Chapter IV with respect to residential building with open plot. Similarly, in Factor 4A there is a reference to plots and the lands for the purpose other than residential, which inter alia deals with open plot. Similarly, in the notification dated 01/04/2008 also in the heading itself mentions rate of tax on buildings or lands. As observed by the Division Bench of this Court in the recent decision in Special Civil Application No.11459/2012 in the case of Adani Gas Limited v. Ahmedabad Municipal Corporation and Ors., the Rules and Notifications are required to be interpreted purposefully and as a whole. Somewhat similar submissions were made when similar provisions under the Gujarat Provincial Municipal Corporation Act i.e. section 141B and the similar Property Tax Rules were challenged and in para 18 the Division Bench has observed as under:
"18. Thus, on a purposive interpretation it is to be held that the prescription of limit provided under subrule (3) of Section 141 B with reference to the building i.e. residential building or non residential building, equally applies while determining the rate of tax with reference to land. Under the circumstances, contention on behalf of the petitioners that with respect to rate of tax on land neither there is any machinery provided nor any limits is prescribed and therefore, Section 141 B of the Act which provides for levy of property tax tax on land is ultra vires to Article 243 X of the Constitution of India cannot be accepted. As observed in above, there is machinery provided for levy of tax on land and even the limits of rate of tax is also prescribed. Whatever be the applicable with respect to the building shall be applicable with respect to the rate of tax on land however subject to 30% of the ultimate rate of tax leviable with reference to the non residential building. Under the circumstance, it is held that Section 141 B of the GPMC Act which provides for levy of general tax on land on carpet area raises is not ultra vires to Article 243 X of the Constitution of India. Similarly, Taxation Rules (Amendment) 2001 also are not held to be ultra vires to Article 243 X of the Constitution of India and / or ultra vires to the GPMC Act."
That the submission on behalf of the petitioners that the Taxation Rules and the notification dated 01/04/2008 do not deal with the imposition of tax on lands has no substance cannot be accepted.
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7.6 Now, so far as the submission on behalf of the petitioners that
sections 99A and 104 of the Act are ultra vires to Article 243X of the Constitution of India is concerned, identical question came to be considered by the Division Bench of this Court in the case of Adani Gas Limited (Supra) and while dealing with the challenge related to the constitutional validity of the provision of section 141B of the Gujarat Provincial Municipal Corporation Act on the ground that the same is violative of Article 243X of the Constitution of India since it does not prescribe any maximum limit in the matter of municipal taxation, the Division Bench of this Court has observed and held as under:
"16.5. Section 141 B of the GPMC Act is sought to be held ultra vires on the ground that the same is in violation of Article 243 X of the Constitution of India. As stated above, it is the case on behalf of the respective petitioners that under Article 243 X of the Constitution of India legislature of a State, may, by law authorize the Municipality to levy, collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such limits as may be specified in law. Thus, according to the petitioners the law authorizing the municipality to levy, collect and appropriate tax must have been passed by the legislature of the State and that the legislature itself must prescribe procedure and the limits. It is the case on behalf of the respective petitioners that for the purpose of Article 243 X of the Constitution of India, the law will not include rules, regulations, notifications etc. According to the petitioners, no limits are prescribed in Section 141 of the BPMC/ GPMC Act for property tax on land as the State legislature has prescribed the limits in Section 141 B of the GPMC Act for property tax on building only. Thus, it is the case on behalf of the petitioner that with respect to the property tax on land no limits are prescribed and therefore, the levy of property tax on land is violative of Article 243 X of the Constitution of India. However, on fair reading of Article 243 X of the Constitution of India, it appears that said Article provides that the legislature of a State may by law authorize the Municipality to levy, collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such limits as may be specified in law. Thus, it is enabling provision to empower the municipality to provide funds through taxes, tolls etc. It does not provide as to which procedure has to be laid down and what limits are required to be specified. It also does not prescribe any maximum limit. The Constitution only provides only an outline of the Scheme for levy and imposition of tax, fees.
16.6. At this stage, Article 243 X of the Constitution of India in which the the word law is used is also required to be referred to. The word law as used in clause (a) of Article 243 W is necessarily to mean that the law enacted by the State legislature because of usage Page 32 of 39 HC-NIC Page 32 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT of the word such immediately preceding the word law. However, so is not the case under Article 243 X because under Article 243 X the word law is not qualified by the word such.
16.7. Identical question came to be considered by the Full Bench of the Madhya Pradesh High Court in the case of Anil Kumar Gulati(supra), in para 22 and 24 the Full Bench of the Madhya Pradesh High Court has observed and held as under:
"22. The next contention that has been putforth is relatable to realm of excessive delegation. Submission of learned counsel for the petitioners is that the Legislature while engrafting the provisions, namely, Section 126 of the Municipality Act and Section 138 of the Municipal Corporation Act in subsection (1) has used the words 'as may be made by the State Government in this behalf ' and such a prescription in the said enactments is not permissible inasmuch as the constitutional command is in favour of the Legislature alone. It is urged that the Legislature has abdicated its basic legislative powers. On a Xray of the anatomy of both the provisions, it is luminescent that the Legislature after providing certain parameters in subsection (1) of Section 128 as well as in subsection (1) of Section 126 has mentioned 'subject to the rules, as may be made by the State Government in this behalf '. The Constitution has allowed the State Legislature to endow such powers by law. The term "law" has been defined under Article 13(3)(a) of the Constitution and the said definition stipulates that law includes any Ordinance, order, byelaw, rule, regulation, notification, custom or usage in the territory of India to have the force of law. The rules which are statutory have the force of law. The Municipalities Act as well as the Corporation Act has the provisions authorising the State Government to make rules. Section 138 of the Municipal Corporation Act and Section 126 of the Municipalities Act stipulate subject to such rules. The rule making power is vested with the State Government. When the procedure is so laid down and is a part of the enactment and it comes within the definition of the term "law" as per the Constitution. The real crux of the matter is whether the Legislature should have itself said everything and dealt with every spectrum in the statute or left some aspects to be filled up or supplemented or backed by the rules. It is contended with vehemence that by such prescription not only there is violation of the provisions of the Constitution but there is abdication of the essential power of the legislative functions of the State Legislature. As far as the first facet of this contention is concerned, we are not at all impressed as the provisions in the Constitution use the word "law" made by the legislature. Legislature itself has authorised under the statute the State Government to made rules. The second question that forms a Page 33 of 39 HC-NIC Page 33 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT part of this submission is whether such a power could have been delegated. It is well settled in law that the Legislature cannot visualize all circumstances. Some power has to be conferred on the rule making authority for carrying out the purposes of the Act. There are certain parameters and guidelines to which we shall advert to at a later stage. The decisions rendered in the cases of In re Art. 143, Constitution of India and Delhi Laws Act (1912), AIR 1951 332; WesternIndia Theatres Ltd. v. Municipal Corporation of the City of Poona, AIR 1959 SC 586; Banarsi Das v. State of M. P., AIR 1958 SC 909; D. S. Garewal v. The State of Punjab, AIR 1959 SC 512; The Corporation of Calcutta v. Liberty Cinema, AIR 1965 SC 1107; The Municipal Corporation of Delhi v. Birla Cotton, Spinning and Weaving Mills, Delhi, AIR 1968 SC 1232; State of Mysore v. M. L. Nagade and Gadag (1983) 3 SCC 253 : (AIR 1983 SC 762), Darshanlal Mehra v. Union of India, (1992) 4 SCC 28 : (AIR 1992 SC 1848), Almitra H. Patel v.
Union of India, (1998) 2 SCC 416 : (AIR 1998 SC 993) support the proposition that the executive authority can be authorised to frame rules and work under the rules but the said rules should not transgress any of the constitutional provisions and should not travel beyond the scheme of the enactment as that is the source from which they draw their power. In this context, we may profitably refer to the decision rendered in the case of Darshan Lal Mehra (supra) wherein a contention was raised that Section 172(2) of the U.P. Nagar Mahapalika Adhiniyam, 1959 is unconstitutional because the Legislature has abdicated its basic function by delegating the essential legislative powers upon the Municipality to levy the taxes enumerated in the Section. It was contended before the Apex Court that the said power was unguided and uncanalised. In that context the Apex Court held as under (para 7 of AIR 1992 SC) :
"Section 172(2) of the Act authorises the Mahapalikas to impose the taxes mentioned therein, "for the purposes of this Act". The objections and functions cast upon the Mahapalikas are laid down in various provisions of the Act. The taxes under Section 172(2) of the Act, therefore, can be levied by the Mahapalikas only for implementing those purposes and for no other purpose. The Mahapalikas have to provide special civic amenities at the places where cinemas/theatres are situated. So long as the tax has a reasonable relation to the purpose of the Act the same cannot be held to be arbitrary. The rate of tax to be levied and the persons or the class of persons liable to pay the same is determined by inviting objections which are finally considered and decided by the State Government. There is no force in the argument that the legislature has abdicated its function to the Mahapalikas. The tax is levied in accordance with the statutory rules framed by the State Government and the said rules are laid before each Page 34 of 39 HC-NIC Page 34 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT House of the State Legislature for not less than 14 days and are subject to such modifications as the legislature may make during the session they are so laid. In the view we have taken, we are supported by the judgments of this Court, in Gopal Narain v. State of U. P. (1964) 4 SCR 869 : AIR 1964 SC 370 and Western India Theatres Limited v. Municipal Corporation of the City of Poona, (1959) Supp (2) SCR 71 : AIR 1959 SC
586. We, therefore, reject the contention raised by the learned counsel for the petitioners."
24. In view of the aforesaid enunciation of law what emerges is that the basic inherent legislative powers cannot be delegated but to have a functional measure to carry out the purposes of the Act, delegation to that extent is permissible. It is worth noting here that what is canvassed before us is a different kind of proponement. It is urged with rigorous vehemence that the Legislature should have enacted the law itself and should not have left it to the executive. If the aforesaid submission is tested on the touchstone of the aforesaid pronouncement of law, in our considered opinion, the aforesaid argument is totally without any substance inasmuch as the Legislature itself has enacted the provision and in the provision itself has authorized the State Government to make rules. No basic legislative function has been abdicated and, therefore, the said submission does not merit any consideration and we unhesitatingly repel the same." 16.8. Now, considering the scheme of the property tax under the GPMC Act, Section 127(3) provides that Municipal Tax shall be assessed and levied in accordance with the provision of this Act and Rules. Pursuant to Section 127(3), the Municipal Corporation has framed the Rules in exercise of powers under Section 454 of the Act and are approved by the State Government. The rules provide procedure for assessment and collection of the levy. As observed by the Honble Supreme Court in the case of M/s. Goodyear India Limited (supra) and even otherwise there are three stages in the imposition of tax. There is declaration of liability i.e. part of the Statue which determines what percent in respect of what property are liable. Section 127 provides for property tax to be imposed under the Act. Section 141 AA provides as to the component of the property tax and the rate at which it is leviable. Section 141 B provides for rate for general tax on the building and land. Section 99 provides for fixation of rates of tax every year by the municipal Corporation. Thus imposition of levy of tax and rate of taxation is provided by the Statute and the rules provides machinery for assessment and calculation and the rates are to be framed by the Municipal Corporation every year having regard to its need. It is required to be noted at this stage that even under Section 141 B of the Act there is a limit prescribed to levy the tax on the the residential building and other than residential. Thus, considering the entire scheme of the Page 35 of 39 HC-NIC Page 35 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT property tax under the GPMC Act and Rules it cannot be said that there is violation of Article 243 X of the Constitution of India as alleged. On harmonious construction and considering all the provisions of the taxation under the Act and the Rules and for the reasons stated hereinafter, we are of the opinion that even there is provision for limits of the general taxes even with respect to the land also (which shall be dealt with hereinafter).
16.9. Under the circumstances and for the reasons stated above, we are of the opinion that as such Section 141 B of the Act is not ultra vires to Article 243 X of the Constitution of India on the ground that in the Act with respect to tax on land no limits of tax is provided. We are of the view that in the present case and while enacting Section 141 B of the Act i.e. levy and assessment of general taxes on the land, provisions of Article 243 X are complied with as State legislature has enacted law i.e. Act for levy of tax on the building and the land and the said law provide for framing the rules for machinery and calculation of tax and accordingly Taxation Rules (Amendment) 2001 are framed."
7.7 We are in complete agreement with the view taken by the Division Bench in the case of Adani Gas Limited (Supra) and applying the ratio laid down in the aforesaid decision while considering the challenge to sections 99A and 104 of the Act and for the reasons stated hereinabove, it cannot be said that the levy of property tax and/or sections 99A, 104, Taxation Rules, 2007 and/or the notification dated 01/04/2008 are ultra vires to Article 243X of the Constitution of India as contended on behalf of the petitioners.
7.8 Now, so far as the contention on behalf of the petitioners with respect to prescribing the rate of tax, the opportunity of hearing is not provided to the residents/occupiers and therefore, section 104 of the Act is invalid is concerned, at the outset it is required to be noted that as such in the statute there is no such requirement. Somewhat similar submissions were made before the Honble Supreme Court in the case of Avinder Singh (Supra) and while considering the challenge to section 90(5) of the Punjab Municipal Corporation Act, 1976, in para 6 the Honble Supreme Court has observed and held as under:
"6. Shri Yogeswar Prasad urged that S. 90 (2) obligated the municipal body to offer an opportunity to the residents of the city to file objections to the tax proposed and consider them before finalising the impost. This fair procedure must attach to the exercise of the power even under S. 90 (5); and since that has not been done the impugned notification must fail. It is clear from S. 90 that the scheme is that if the municipal corporation wishes to impose a tax under S. 90 (2) it must go through the due process indicated in the Page 36 of 39 HC-NIC Page 36 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT Proviso and secure Government's approval. But if Government is to exercise its power under S. 90 (5) no such procedural fetter is found in the Section. Maybe, that power is different from procedure for its exercise; but unless the statute insists, it is impossible for the court to imply invitation of objections and consideration thereof from the residents. For this simple reason, there is no merit in the submission. Whether the failure to hear before fixing a tax has a lethal effect upon the fiscal power of the Government under S. 90 (5) also is of little moment although urged by the same counsel. Maybe, it is desirable that the State acquaints itself with the actual sentiments of the denizens of the local area before imposing tax on them. But it is not inherent in the constitutional requirements for the exercise of the State's power of taxation that objections should be called for and considered. 'No taxation without representation' is a slogan with a different dimension and has nothing to do with a levy by a government controlled by an elected legislature exercising its power of taxation. We are unable to accede to the contention that representations from the residents not having been invited the taxation notification is bad in law. What is wholesome is different from what is imperative."
Considering the aforesaid decision of the Honble Supreme Court, section 104 of the Act is not required to be declared invalid on the aforesaid ground.
8.0 In view of the above and for the reasons stated above, challenge to sections 99A, 104, Property Tax Rules, 2007 and the notification dated 01/04/2008 fail and consequently challenge to the impugned bills also must fail. Consequently, all the Special Civil Applications deserve to be dismissed and are, accordingly, dismissed. Rule is discharged in all the petitions. Adinterim relief stands vacated forthwith in each of the petitions. In the facts and circumstances of the case, there shall be no order as to costs."
Considering the aforesaid decision of the Division Bench of this Court upholding the constitutional validity of section 99 of the Municipalities Act and considering the provisions of Section 99 of the Municipalities Act read with the relevant Municipality Property Tax Rules, 2007, it cannot be said that section 99 of the Municipalities Act is ultra vires to Article 243X of the Constitution of India. Under the circumstances, challenge to the constitutional validity of section 99 fails.
[8.3] Now, so far as the challenge to section 99(xiva) of the Page 37 of 39 HC-NIC Page 37 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT Municipalities Act is concerned, as, as per the decision of the Hon'ble Supreme Court referred to hereinabove in which with respect to the very levy of property tax on Mobile Towers under the provisions of the Gujarat Municipalities Tax Act was involved and the Hon'ble Supreme Court has upheld the levy of property tax on Mobile Towers treating the Mobile Towers as "building" and the decision of this Court in the cases of Vodafone Mobile Services Ltd. (Supra), Reliance Jio Inforcomm Ltd. (Supra) and ATC Telecom Tower Corporation Ltd. (Supra) and once the "Mobile Towers" are treated as "building", the property tax leviable on "lands and building" shall also be applicable to the "Mobile Towers", section 99(xiva) of the Municipalities Act cannot be said to be unconstitutional and/or ultra vires to Article 243 X of the Constitution of India. Under the circumstances also, the challenge to section 99(xvia) of the Municipalities Act also shall fail.
[8.4] Similarly, challenge to section 99(1)(xiva) of the Municipalities Act to levy the tax on Mobile Towers also must fail inasmuch as once the Hon'ble Supreme Court as well as this Court has held that the "Mobile Towers" are "buildings" and therefore, on "Mobile Towers" whatever the tax on building are leviable, it cannot be said that section 99(1)(xiva) of the Municipalities Act is ultra vires to Article 243 X of the Constitution of India and/or the same is unconstitutional.
[8.5] Now, so far as the challenge to the impugned demand on the ground that the retrospective levy / demand is not permissible is concerned, it is required to be noted that the aforesaid is required to be considered case by case and with respect to each Municipality and the facts with respect to each Municipality shall differ. It is also required to be noted that in the earlier round of litigation which reached upto the Hon'ble Supreme Court, the Hon'ble Supreme Court permitted the Page 38 of 39 HC-NIC Page 38 of 39 Created On Wed Aug 16 01:14:58 IST 2017 C/SCA/6668/2017 JUDGMENT respective Panchayats to raise the demand but actual recovery was stayed. Therefore, the aforesaid is also required to be considered with respect to each Municipality individually. Therefore, in the present petition we restrict the challenge to the constitutional validity of sections 99(1) and 99(1)(xiva) of the Municipalities Act and the levy of property tax on "Mobile Towers" only and we relegate the petitioner to challenge the demand on the ground of retrospective levy of tax before appropriate Court / Forum by joining the Municipality individually. As and when such proceedings are initiated the same be considered in accordance with law and on its own merits for which we have not expressed anything on merits.
[9.0] In view of the above and for the reasons stated above, challenge to the levy of property tax on Mobile Towers and challenge to the constitutional validity of sections 99(1) and 99(1)(xiva) of the Municipalities Act fail and the present petition deserves to be dismissed and is, accordingly, dismissed.
Sd/ (M.R. SHAH, J.) Sd/ (B.N. KARIA, J.) Ajay Page 39 of 39 HC-NIC Page 39 of 39 Created On Wed Aug 16 01:14:58 IST 2017