Karnataka High Court
Smt M S Savithramma D/O. Madhav Rao vs State Of Karnataka on 1 February, 2023
Author: Hemant Chandangoudar
Bench: Hemant Chandangoudar
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WP No. 8114 of 2009
C/W WP No. 13009 of 2009
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 1ST DAY OF FEBRUARY, 2023
BEFORE
THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR
WRIT PETITION NO. 8114 OF 2009 (LB-BMP)
C/W
WRIT PETITION NO. 13009 OF 2009 (LB-BMP)
IN WRIT PETITION NO. 8114 OF 2009:
BETWEEN:
Digitally signed by
R HEMALATHA
Location: HIGH 1. SMT. M.S. SAVITHRAMMA
COURT OF
KARNATAKA D/O. MADHAV RAO,
AGED ABOUT 55 YEARS,
RESIDING AT NO.47/11, 3RD MAIN ROAD,
MOUNT JOY EXTENSION, HANUMANTHA NAGAR,
BANGALORE-560 019.
2. T.G. SATYA NARAYANA
S/O T GIRIYAPPA,
AGED ABOUT 67 YEARS,
R/AT SITE NO.1142, 22ND CROSS,
30TH MAIN, BANASHANKARI
2ND STAGE EXTENSION,
BANGALORE-560 070.
3. RELIANCE COMMUNICATIONS LIMITED
HAVING ITS OFFICE AT NO.39/2,
"R COM HOUSE", 4TH FLOOR,
HESSARGHATTA CROSS, 8TH MILE,
TUMKUR ROAD, PEENYA, BANGALORE-560 057,
REPRESENTED BY ITS LEGAL-HEAD,
MR. GAUTAM BOSE.
4. RELIANCE INFRATEL LIMITED
HAVING ITS OFFICE AT NO.39/2,
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WP No. 8114 of 2009
C/W WP No. 13009 of 2009
"R COM HOUSE", 4TH FLOOR,
HESSARGHATTA CROSS, 8TH MILE,
TUMKUR ROAD, PEENYA,
BANGALORE-560 057,
REPRESENTED BY ITS LEGAL-HEAD,
MR. GOUTAM BOSE.
5. WIRELESS-TT INFO SERVICES LTD.,
HAVING ITS OFFICE AT
AT 5TH FLOOR, S.J.R. PRIMUS,
NO.1, INDUSTRIAL LAYOUT,
7TH BLOCK, KORAMANGALA,
BANGALORE-560 095,
REPRESENTED BY ITS SENIOR EXECUTIVE-LEGAL,
SHRI M.S. GAUTHAM.
6. INDUS TOWERS LTD.,
VAKIL SQUARE, NO.56,
BANNERGHATTA ROAD,
BANGALORE-560 029,
REPRESENTED BY ITS CIRCLE LEGAL-HEAD,
SRI SRINATH.
7. M/S. ASTER INFRASTRUCTURE PVT. LTD.,
HAVING ITS OFFICE NO.27
2ND FLOOR, 6TH TEMPLE ROAD,
16TH CROSS, MALLESHWARAM
BANGALORE-560 003,
REPRESENTED BY ITS CIRCLE HEAD KARNATAKA,
COL.GANGADHARAN.
8. VODAFONE ESSAR SOUTH LTD.,
PRESTIGE BLUE CHIP
GROUND FLOOR, BLOCK I,
NO.9, HOSUR ROAD,
BANGALORE-560 029,
REPRESENTED BY ITS HEAD LEGAL,
SHRI SANJIT NAGARKATTI.
9. AIRCEL LIMITED
HAVING ITS OFFICE AT NO.66/5,
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WP No. 8114 of 2009
C/W WP No. 13009 of 2009
H.M.VIBHA TOWERS,
LUSKAR HOSUR ROAD,
AUDUGODI, BANGALORE-560 029,
REPRESENTED BY ITS CIRCLE BUSINESS HEAD,
MR. VINAY CHANDHOK.
10. M/S. BHARATI AIRTEL LIMITED
NO.55, DIVYASHREE TOWERS,
BANNERGHATTA ROAD,
OPPOSITE JAYADEVA HOSPITAL,
BANGALORE-560 029,
REPRESENTED BY ITS LEGAL HEAD,
SRI PRASHANTH N.
...PETITIONERS
(BY SRI UDAYA HOLLA, SENIOR COUNSEL FOR
SRI GURURAJ D.M., ADVOCATE)
AND:
1. STATE OF KARNATAKA
BY ITS CHIEF SECRETARY,
M.S. BUILDING, BANGALORE.
2. THE COMMISSIONER
BRUHAT BANGALORE MAHANAGARA PALIKE,
N.R. SQUARE, BANGALORE.
...RESPONDENTS
(BY SRI R. SRENIVASA GOWDA, AGA FOR R-1;
SRI S.N. PRASHANTH CHANDRA, ADVOCATE FOR R-2)
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF
THE CONSTITUTION OF INDIA PRAYING TO DECLARE THAT
THE MUNICIPAL AUTHORITIES/ LOCAL BODIES HAVE NO
AUTHORITY TO MAKE A FISCAL DEMAND IN RESPECT OF
TELECOMMUNICATION TOWERS INSTALLED BY THE
PETITIONER EITHER UNDER THE PROVISIONS OF KARNATAKA
MUNICIPAL CORPORATIONS ACT OR UNDER THE TERMS OF
THE LICENSE ISSUED UNDER THE PROVISIONS OF THE INDIAN
TELEGRAPHS ACT AND ETC.
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WP No. 8114 of 2009
C/W WP No. 13009 of 2009
IN WRIT PETITION NO.13009/2009:
BETWEEN:
M/S. BHARAT SANCHAR NIGAM
BANGALORE TELECOM DISTRICT,
TELEPHONE HOUSE, RAJBHAVAN ROAD,
BANGALORE-560 001, REPRESENTED BY
SHRI PRINCIPAL GENERAL MANAGER.
...PETITIONER
(BY SRI Y. HARIPRASAD, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA
BY ITS CHIEF SECRETARY,
M.S. BUILDING, BANGALORE.
2. THE COMMISSIONER
BRUHAT BANGALORE MAHANAGARA PALIKE,
N.R. SQUARE, BANGALORE.
...RESPONDENTS
(BY SRI R. SRINIVASA GOWDA, AGA FOR R-1;
SRI S.N. PRASHANTH CHANDRA, ADVOCATE FOR R-2)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
DECLARE THAT THE MUNICIPAL AUTHORITIES/ LOCAL BODIES
HAVE NO AUTHORITY TO MAKE A FISCAL DEMAND IN RESPECT
OF TELECOMMUNICATION TOWERS INSTALLED BY THE
PETITIONER EITHER UNDER THE PROVISIONS OF KARNATAKA
MUNICIPAL CORPORATIONS ACT OR UNDER THE TERMS OF
THE LICENCE ISSUED UNDER THE PROVISIONS OF THE
INDIAN TELEGRAPHS ACT IN SO FAR AS PETITIONER IS
CONCERNED AND ETC.
THESE PETITIONS, COMING ON FOR DICTATING
ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:
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WP No. 8114 of 2009
C/W WP No. 13009 of 2009
ORDER
Since the issues involved in these petitions are similar, they are taken up together and disposed of through this common order.
In WP.No.8114/2009:
2. This petition is filed seeking for the following reliefs:
a. Issue a writ in the nature of mandamus or any other appropriate writ, order or direction declaring that the Municipal Authorities/Local Bodies have no authority to make a fiscal demand in respect of telecommunication towers installed by the petitioner either under the provisions of Karnataka Municipal Corporations Act or under the terms of the license issued under the provisions of the Indian Telegraphs Act insofar petitioner is concerned.
b. Issue a writ in the nature of mandamus or any other appropriate writ, order or direction declaring that the levy of Property Tax, on telecommunication towers by the respondents is illegal and unconstitutional insofar petitioner is concerned.
c. Issue a writ in the nature of certiorari or any other appropriate writ, order or direction, quashing the Bruhat Bangalore Mahanagara Palike Property Tax Rules dated 13.01.2009 vide Annexure-B. -6- WP No. 8114 of 2009 C/W WP No. 13009 of 2009
3. The petitioners have established the network by erecting telecommunication towers on the private properties and various locations after obtaining permission from the owners of the immovable properties. Petitioner Nos.1 and 2 are the owners of the properties on which the telecommunication towers are installed by petitioner Nos.3 to 10 who are the service providers.
4. Such being the case, respondent-BBMP is seeking to levy tax on the telecommunication towers installed by the petitioners within its jurisdiction by expanding the definition of building to include telecommunication towers under the impugned Rules.
5. Sri. Udaya Holla, learned Senior Counsel appearing for the petitioners' counsel would make the following submissions:
a. The impugned Rule in question is ultra Vires the Act, since the Rule expands the definition of building to include telecommunication towers and imposes a tax pursuant to the said Rule. The Hon'ble Supreme Court has held that the Rule cannot travel beyond the scope of the enabling Act or be inconsistent therewith or -7- WP No. 8114 of 2009 C/W WP No. 13009 of 2009 repugnant thereto and places reliance on the following decisions:
1) 1983(2) SCC 402 (State of Karnataka and another
-vs- H Ganeh Kamath and others)(para 7)
2) 2003(3) SCC 321 (St. Johns Teachers Training Institute -vs- Regional Director, National Council for Teacher Education and another) (para 10);
3) 2006(4) SCC 517 (State of T.N. and another -vs- P. Krishnamurthy and others) (para 15 to 20)
4) 2016(7) SCC 703 (Cellular Operators Association of India and others -vs- Telecom Regulatory Authority of India and others (para 34, 43 to 45).
b. Similarly, Hon'ble Supreme Court in the case of V. Sudeer v. Bar Council of India (1999) 3 SCC 176 (para 20) has held that the rule imposed should have a statutory peg to hang and if there is no statutory peg on which to hang, then it will have no foothold and would be branded as being still born. Any Rule going beyond its statutory function must be held to be ultra vires and in- operative at law.
c. Notwithstanding the fact that the three Acts (Karnataka Municipalities Act, 1964, Karnataka Municipal Corporations Act, 1976 and Karnataka Panchayat Raj Act, 1993) did not include telecommunication towers in the definition of 'building', the Municipal Authorities as well as Local Bodies were trying to charge building tax on telecommunication towers, which admittedly are not buildings both in reality as well as in the definition found -8- WP No. 8114 of 2009 C/W WP No. 13009 of 2009 in those enactments. Under these circumstances, the writ petitions were filed for:
(i) a declaration that the Municipal Authorities/Local Bodies have no authority to make fiscal demand in respect of telecommunication towers:
(ii) a declaration that levy of property tax on telecommunication towers is illegal and unconstitutional and
(iii) to quash the BBMP Tax Rules. Writ petitions were filed in the year 2009.
d. The learned Single Judge disposed of the writ petitions quashing the demand notice impugned therein and held that the quantified amount as fixed by the Bruhat Bengaluru Mahanagara Palike has to be adopted by other local bodies and further directed to frame such laws/rules in this regard.
e. The order passed by learned Single Judge was examined by the Division Bench of this Court in the case of Wireless T.T. Info Services Limited -vs- State of Karnataka and Others [2011 SCC Online Kar 2247] at para 12 wherein it has held as follows:
"12. The above provisions indicate that apart from the other specific items for which power to tax has been provided, the power is also to impose tax on land and building alone. In fact in Karnataka Municipalities Act, 1964, the provision -9- WP No. 8114 of 2009 C/W WP No. 13009 of 2009 for tax on advertisements is exhaustive and includes ''post'' and ''structure'' and the term ''structure'' has been explained further but it only relates to advertisement. This in fact indicates that the telecommunication structure has not been indicated separately nor does it get included in the definition of ''building''. Therefore, we are of the considered opinion that the telecommunication tower/post is not liable to tax under the existing power available to impose tax on ''land'' and ''buildings''."
f. An amendment was brought about to all the three Acts referred to supra, to include telecommunication towers within the definition of 'building'. If at all, levy of tax on telecommunication towers can be levied, it can be levied only subsequent to the year 2015 and not earlier thereto.
g. The Hon'ble Supreme Court in the case of Ahmedabad Municipal Corporation -vs- GTL Infrastructure Limited and others (2017) 3 SCC 545, has held that the tax can be levied on mobile towers was with reference to the amendment made to the State of Gujarat Act including Section 127 which specifically imposes tax on mobile towers. Moreover, the said judgment has not taken into account and consideration of the earlier judgment of the Supreme Court in the case of Indian City Properties Limited -vs- Municipal Commissioner of Greater Bombay (2005) 6 SCC 417 wherein Hon'ble Supreme Court has held that pump room, underground, tank, RCC tank, AC Plant etc., which can be moved,
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WP No. 8114 of 2009C/W WP No. 13009 of 2009 cannot be held to be a building or part of the building. The 2017 judgment is contrary to the earlier judgment of the Supreme Court, and rendered without referring to the same and to that extent is per incuriam.
h. Taxes cannot be imposed on the basis of bye- laws, unless the statute under which the bye-laws are made specifically authorize such imposition, since the Karnataka Municipal Corporations Act, 1976 (for short 'the Act of 1976') does not authorize imposition of taxes on telecommunication towers which are structures. In support of his contention, he places reliance on the decision of the Hon'ble Supreme Court in the case of Bimal Chandra Banerjee Vs. State of Madhya Pradesh and others [1970 (2) SCC 467].
6. On the other hand, learned counsel appearing for the respondent-BBMP would submit the following:
a) The term 'Building' is defined under Section 2(1-A) of the Act, 1976 which includes telecommunication towers, and as such, the BBMP is empowered to levy tax by taking the telecommunication tower as building/hoardings as defined under Section 2(1-A) of the Act, 1976. Para c of third proviso to Section 108-A(2) of the Act, 1976 specifies that respondent-BBMP may, in lieu of the tax under sub-section 2 of the Act, 1976, fix any lump sum amount as annual tax, irrespective of zonal classification or any other class of building or structures.
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WP No. 8114 of 2009C/W WP No. 13009 of 2009
b) Rule 2(v) of the BBMP Property Tax Rules, 2009 specifies that the term 'building' also includes towers and hoardings and Rule (vi) defines the term 'built-up area' which includes telecommunication and other towers and hoardings erected on the surface of the top or any other open space of land or building and explanation to the Rule (2) (vii) of the Rules, specifies that the telecommunication towers includes the area covered by extremity of foundation multiplied by the total site.
c) In support of his contention, he places reliance on the decision of the Hon'ble Supreme Court in the case of Ahmedabad Municipal Corporation Vs. GTL Infrastructure ltd., and others [2017(3) SCC 545]. In WP No.13009/2009:
7. The petitioner is the corporation established by the Central Government for the purpose of carrying the activities of the public utilities. Petitioner claims that the telecommunication towers have been installed on the public buildings as well as on the private properties. The petitioner claims that they should be exempted from payment of property tax as specified under Article 285 of the Constitution of India and also the respondent- BBMP has no authority to levy tax on telecommunication
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WP No. 8114 of 2009C/W WP No. 13009 of 2009 towers, since the telecommunication towers does not come under the definition of building as specified under Section 2(1-A) of the Act, 1976.
8. I have examined the submissions made by the learned counsel for the parties.
The points that arise for consideration are as follows:
i) Whether the term `building' defined under Section 2(1-A) prior to amendment of Karnataka Municipal Corporations Act, 1976 in the year 2015 includes `telecommunication tower'?
ii) Whether the Rules, 2009 framed by the subordinate legislation is in excess of power conferred under Section 421 read with Sections 108A and 110 of the Act, 1976?
iii) Whether the Bengaluru Bruhat
Mahanagara Palike can levy tax on
telecommunication towers erected by the
Bharat Sanchar Nigam on the properties
belonging to it or the Union of India?
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WP No. 8114 of 2009
C/W WP No. 13009 of 2009
9. The relevant provisions of the Act, 1976 are reproduced below to answer the points raised for consideration.
10. Section 2(1-A) of the Act, 1976 prior to amendment specifies that the term building includes:-
(a) a house, out-house, stable, privy, shed, hut, wall, verandah, fixed platform, plinth, door step and any other structure whether of masonry, bricks, wood, mud, metal or any other material whatsoever;
(b) a structure on wheels simply resting it he ground without foundations;
(c) a ship, vessel, boat, tent, and any other structure used for human habitation or used for keeping or storing any article or goods;
11. Section 103 of the Act, 1976 deals with the taxes which may be imposed and the same reads thus:
"103. Taxes which may be imposed.- Subject to the general or special orders of Government, a corporation shall,- 1 [(a)[xxx] ]
(b) [at rates not exceeding those specified in this Act]1 levy any one or more of the following taxes or fee:-
(i) a tax on 1 [buildings or vacant land or both] 1 situated within the city (hereinafter referred to as the property tax);
[(ii) xxx] [(iii) x x x]
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WP No. 8114 of 2009C/W WP No. 13009 of 2009 [(iv) x x x] [(v) [xxx] ]
(vi) a tax or fee on advertisement;
(vii) a duty on certain transfers of property in the shape of an additional stamp duty;
[(viii) x x x] [(ix) x x x] [Proviso x x x]"
12. Section 108-A of the Act, 1976 inserted by Act No.2 of 2009 w.e.f. 13.1.2009 deals with the methodology of computation/calculation of property tax or the manner of imposition of tax and the same reads thus:
"108A. Levy and calculation of property tax in respect of Bruhath Bangalore Mahanagara Palike.-
(1) Notwithstanding anything contrary contained in this Act, subject to such exemptions provided under this Act and such rules as may be prescribed, the property tax of all buildings or vacant lands or both situated within the city of Bruhath Bangalore Mahanagara Palike area shall be levied every year in the following manner.
(2) The property tax shall be levied by the Bruhath Bangalore Mahanagara Palike by resolution passed as specified in section 106 at such percentage not being less than 20 percent and not more than 25 percent of the taxable annual value of a building, vacant land or both. The taxable annual value of a building, vacant land or both shall be calculated by multiplying the corresponding "unit area value" with
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the total built-up area of a building, vacant land or both for ten months, minus depreciation at such rate, as may be prescribed, depending on the age of a building.
Explanation.- For the purpose of this section, "Unit Area Value" means an average rate of expected returns from the property per sq.ft., per month determined by the Commissioner, Bruhath Bangalore Mahanagara Palike on the basis of the average market rate determined through mass appraisal method or real estate market information or any other reliable source or combination of these sources that he may considers it as 1977: KAR. ACT 14] Municipal Corporations 423 sufficient and reasonable having regard to the location, type of construction of the building, nature of use to which the vacant land or building is put, area of the vacant land, built-up area of the building, age of the building, parking area of vehicles in non-residential building where it is charged and such other criteria as may be prescribed. Different rates may be determined for different area or street by classifying into zones, different nature of use to which the vacant land or building is put and for different class of buildings and vacant lands:
Provided that no such "unit area value" shall come into force unless it is previously published in the official Gazette for the information of the persons likely to be affected and an opportunity is provided to make representation or suggestions, if any, in this regard:
Provided further that the land appurtenant to a building to the extent not exceeding thrice the area occupied by such building shall be exempted from the property tax:
Provided also that subject to such condition and in such circumstances as may be notified, the Commissioner, Bruhath Bangalore Mahanagara
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Palike, may, in lieu of the tax under sub-section (2), fix any lumpsum amount as annual tax, irrespective of zonal classification, in respect of,-
(a) a built-up area having less than 300 sq.ft., in a slum area declared as such by the Karnataka Slum Clearance Board or the Commissioner, Bruhath Bangalore Mahanagara Palike; and
(b) an area used as parking area in a non-
residential building and being charged for its use by the owner or the occupier.
(c) any other class of building or structure as he deems fit."
Point No.(i):
13. Section 2(1-A) of the Act, 1976 specifies that the telecommunication tower erected on the surface of the property or on the top of the building does not fall under the definition of building.
14. Section 103 of the Act, 1976 specifies that tax can be levied by the Corporation subject to general or special orders of government.
15. Section 103(b) of the Act, 1976 specifies that the Corporation may impose tax at such rate not exceeding those specified in the Act on building or vacant land or both, but does not specify for levying tax on the telecommunication tower.
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16. Section 108-A refers to tax on building and in para-c of third proviso to section 108-A(2) after the words other class of building, the word `structure' is mentioned and the word `structure' has to be read in conjunction with the term `building' as defined in Section 2(1-A) of the Act, 1976 and not independently so as to mean that `structure' includes telecommunication tower. Section 2(1-A) was amended by Act No.6 of 2015 with effect from 9.1.2015 and under the said amendment, the telecommunication towers were brought within the definition of `building' and also within the taxable net. If the telecommunication towers were already amenable to tax under Section 108-A, there was no requirement to amend the definition of building under Section 2(1-A) to include the telecommunication tower within the meaning of building.
17. The Division Bench of this Court in the case of Wireless T.T Info Service Limited-vs-State of Karnataka [2011 SCC OnLine Kar 2247] with reference to the term building defined under Section 2(1-A) and Section 103 of the Act, 1976 quashed the demand notices issued by local Authorities levying tax on the telecommunication towers by relying on the decision of
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WP No. 8114 of 2009C/W WP No. 13009 of 2009 the Hon'ble Supreme Court in the case of Indian City Properties Limited v. Municipal Commissioner of Greater Bombay [2005 (6) SCC 417] wherein it was held that, all the buildings may be a structure, but all structures are not building, and the word `structure' found in the Act must be read ejusdem generis with the preceding words. The Hon'ble High Court of Gujarat in the case of Indus Tower Limited -vs- State of Gujarat (supra) has held that the telecommunication towers do not fall within the definition of the building, and therefore tax cannot be levied on telecommunication tower, and it was open for the legislature to make such amendment in the Act making provision for bringing the technological advances within the purview of the Act.
18. A Division Bench of this Court in the case of K B Dani v. State of Karnataka [ILR 1979 Kar 2315] at para-10 has held that subsequent amendment could be guide for interpretation of earlier provisions of the statute with reference to the amended Karnataka Sales Tax Act which included tractor within the meaning of machinery and in that context, it was held that under the unamended Act, tractor is not a machinery. By inserting the term `structure' in the third proviso to Section 108-A(2) of the Act, 1976, it cannot be held that `building'
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WP No. 8114 of 2009C/W WP No. 13009 of 2009 specified in unamended Section 2(1-A) of the Act, 1976 includes structure so as to confer power on the respondent - BBMP to levy the tax on the telecommunication tower as rightly contended by Sri Uday Holla, learned Senior Counsel.
19. The Hon'ble Supreme Court in the case of Indian City Properties Ltd. (supra) at para-19 has held that the word `structure' is used to generic term so that while all buildings may be structure, all structures are not buildings.
20. The Hon'ble Supreme Court in the case of Ahmedabad Municipal Corporation (supra) with reference to the definition of building under the Gujarat Provincial Municipal Corporation Act, 1949 at para-29 has held that a general word like `building' must be construed to reasonably extend to all ancillary and subsidiary matters and the common parlance test adopted by the High Court to hold the meaning of levy of tax on building and machinery does not appear to be right keeping in mind the established and accepted principles of interpretation of a constitutional provision or legislative entry. It was further held that a dynamic rather than a pedantic has to be preferred, if the constitutional document is to meet the
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WP No. 8114 of 2009C/W WP No. 13009 of 2009 challenge of a fast developing world throwing new frontiers of challenge, and an ever changing social order. This decision was rendered with reference to the amendment brought to Section 127 of the Gujarat Act which is the charging Section and provides for imposing tax on mobile towers and the term `mobile tower' was also defined under the amended Gujarat Act.
21. The Hon'ble Supreme Court in the case of Sundeep Kumar Bafna v. State of Maharashtra [(2014) 16 SCC 623] has held that when the High Court is often encountered with two or more mutually irreconcilable decision of the Supreme Court cited at the bar, the inviolable recourse is to apply the earliest view as the succeeding one would fall in the category of per incuriam. The Hon'ble Supreme Court in the case of Hyder Consulting (UK) Ltd. -vs- State of Orissa [(2015) 2 SCC 189] has held that a decision can be said to be given per incurium when the court of record has acted in ignorance of any previous decision of its own, or a subordinate court has acted in ignorance of a decision of the court of record.
22. In view of the aforesaid ratio enunciated by the Hon'ble Supreme Court, the decision rendered in the case of
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WP No. 8114 of 2009C/W WP No. 13009 of 2009 Ahmedabad Municipal Corporation supra cannot be held to be binding precedent, and the decision of the Hon'ble Supreme Court in the case of Indian City Properties Ltd (supra) wherein it has been held that all structures are not building is binding. Point No.(ii):
23. The Bruhat Bengaluru Mahanagara Palike Property Tax Rules, 2009 came into effect from 13.1.2009, and under Rule 2(v) of the Rules, building also includes towers and hoardings. Rule 2(vi) defines the term `built up area' which includes telecommunication and other towers. By virtue of this Rule, the definition of building was expanded to include the telecommunication tower and thus, the telecommunication towers were sought to be brought within the taxable netthough the principal Act before amendment did not provide for levying of tax on telecommunication towers.
24. The Hon'ble Supreme Court in the case of State of Karnataka v. H. Ganesh Kamath, [(1983) 2 SCC 402] has held that Rule cannot travel beyond the scope of the enabling Act or be inconsistent therewith or repugnant thereto. Similarly, the Hon'ble Supreme Court in the case of V. Sudeer v. Bar Council of India [(1999) 3 SCC 176] at para-20 has held that Rule
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WP No. 8114 of 2009C/W WP No. 13009 of 2009 imposed should have statutory peg and if there is no statutory peg on which to hang, then it will have no foothold and would be branded as being still born and any Rule going beyond its statutory functions must be held to be ultra vires and inoperative at law.
25. The Act, 1976 does not provide for a charging Section to levy tax on telecommunication towers before amendment to the definition of building. The impugned Rules, 2009 were framed before amendment to the definition of building, and the amendment came into effect from 9.1.2015 bringing telecommunication towers under the definition `building'. In the absence of source of power, the impugned Rules, 2009 expanding the definition of building to include telecommunication and other towers to bring within the taxable net, by subordinate legislation is held to be made in excess of the power conferred under Section 421 read with Section 108-A and Section 110(2) of the Act, 1976 and not within the bounds of the power delegated and the same is held to be invalid or unconstitutional.
Point No.(iii):
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26. The petitioner in W.P. No.13009/2009 is the Government of India Undertaking incorporated under the Companies Act, to carry on the telecommunication activities and for carrying out the said activities, the petitioner has installed the towers on private properties. Article 285 of the Constitution of India specifies that the property of the Union shall, save in so far as parliament may by law, otherwise be exempt from all taxes imposed by State or by any Authority within a State. To put it simply, the local Authority cannot levy tax on the immoveable property belonging to the Union of India.
27. The petitioner in WP No.13009/2009 is exempted from payment of tax on the telecommunication towers erected on the property belonging to it or the Union of India.
28. In view of the preceding analysis, it is held as follows:
i) The un-amended Section 2(1-A) defining the term `building' does not include telecommunication towers erected on the surface of the land or on the top of the building.
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WP No. 8114 of 2009C/W WP No. 13009 of 2009
ii) The word `structure' in para-c of third proviso to Section 108-A(2) cannot be extended to the term `building' as defined under the unamended Section 2(1- A) of the Act.
iii) The impugned Rules, 2009 framed by the sub legislation in the absence of source of power is held to be made in excess of the power conferred under Section 421 read with Section 108-A and Section 110 of the Act, 1976.
iv) The respondent - BBMP cannot levy tax on telecommunication towers erected by the Bharat Sanchar Nigam Limited (Government of India undertaking) on the immoveable property belonging to it, or the Union of India save as the parliament may by law provide.
v) This order shall not come in the way of
respondent - BBMP in levying tax on the
telecommunication towers under the amended
provisions of Act, 1976 w.e.f 9.1.2015.
Sd/-
JUDGE RKA/bkm LIST NO.: 1 SL NO.: 5