BHARAT SANCHAR NIGAM LTD Vs. STATE OF KERALA

JUDGEMENT

(1.) The review petitioner is the original writ petitioner as well as the appellant. Consequent to the dismissal of W.P.(C) No.10972/2017 by the learned Single Judge, the matter came up on appeal before us and vide judgment dated 13-04-2018 the appeal was dismissed. The appellant has now come up before us with a review petition.

(2.) The Bharath Sanchar Nigam Limited (for short 'BSNL'), the petitioner, is a company incorporated under the Companies Act, 1956 and solely owned by the Government of India. The Secretary, Thrissur Corporation, issued two demand notices (Exts.P1 and P2) demanding a sum of Rs.3, 86, 268/- and Rs.9, 03, 174/- respectively for the period from 2000-2001 to 2006-2007 as property tax in respect of buildings of the telephone exchange as well as the staff quarters. The defence taken up by the review petitioner was that they are exempted from payment of tax by virtue of Article 285 of the Constitution of India and hence a writ of certiorari was sought to quash Exts.P1 and P2 demand notices. After hearing the petitioner as well as the respondents, the learned Single Judge dismissed the Writ Petition. In appeal, we held that the petitioner was not entitled to exemption under Article 285 of the Constitution in as much as a Government company cannot claim exemption of tax imposed under a Statute. The argument of the petitioner that the property has not been transferred to the Company by the P & T Department was also not found acceptable.

(3.) Aggrieved by the dismissal of the appeal, the writ petitioner has filed this Review Petition, wherein the main ground for review is that the transfer of property to BSNL has to be compulsorily registered and only thereafter the property tax will become due from BSNL and it is settled that the ownership is conveyed only by a registered deed. It is also stated that the State of Kerala, Local Self Government Department has issued Letter No.28321/12/06/Self-Gov. dated 17-08-2006 addressed to the Secretary, Panchayat Director, Thiruvananthapuram, with respect to exemption of BSNL buildings situated in Payyannur Grama Panchayat. It was directed that, as of now the BSNL buildings are in the name of the President and since they are not transferred to the company till now, they should be exempted from property tax by considering them as Central Government buildings. Copy of that letter is Annexure A. Thereafter, the State Government, through its Principal Secretary, issued Circular No.39457/RC2/2010/LSGD dated 19-09-2011 directing thus; "All Local Self Government Institutions are instructed that the BSNL buildings which are still in the name of HE the President of India shall be exempted from property tax under Article 285(1) of the Constitution of India, whereas property tax can be levied on those buildings owned by BSNL, but which are not in the name of HE the President of India now." Copy of the above-said circular is Annexure B. It is pointed out that Annexures A and B were not brought to the notice of the Court due to an omission and those may be considered, because of these circulars superseding Circular No.43657/D4/04/LSGD dated 09-12-2014 (Annexure C herein), which formed the basis of Exts.P1 and P2. It is further submitted that the mandatory procedures provided in Section 203(3) to (13) of the Kerala Panchayat Raj Act, 1994 has not been followed prior to the demand of tax from the BSNL. The mandatory procedures, which ought to have been followed, is also detailed in the petition. Further, it is submitted that for buildings and property in a Panchayat to be taxed, a resolution has to be passed by each Panchayat determining the levy of tax and followed by publication of the new tax as provided under Rules 3, 4 and 6 of Kerala Panchayat Raj Act (Taxation, Levy and Appeal) Rules, 1996. As such, the demand of property tax from the BSNL is without jurisdiction in the Panchayats concerned, where Kerala Panchayat Raj Act is applicable. It is also pointed out by the petitioner that Section 233(3) of the Kerala Municipality Act, 1994, provides for certain procedure, which has not been followed. The Rules under the Kerala Municipality (Property Tax, Service Tax and Surcharge) Rules, 2011 has also not been followed. The details of the violation of Rules has also been given in the petition. It is stated that the Municipality or the Panchayat will not get jurisdiction to demand property tax from BSNL without following the abovementioned mandatory provisions in the respective Kerala Panchayat Raj Act and the Kerala Municipality Act and the Rules prescribed therein. It is further submitted that a composite notice for tax from 2000-2001 to 2006-2007 issued is arbitrary and illegal and that there is a period of limitation of three years for demanding tax under Section 243 of the Panchayat Raj Act as well as Section 282 of the Kerala Municipality Act and four years to demand escaped tax. It is only fair and just that the judgment sought to be reviewed is recalled and the Writ Appeal heard on merits after considering the above-mentioned legal issues. It is also submitted that huge amounts are demanded from the BSNL by the Panchayats/ Municipalities spread over Kerala, without following the mandatory procedures provided in the Acts and the Rules.