INDUS TOWERS LTD Vs. STATE OF GUJARAT

JUDGEMENT

(1.) By way of this petition under Article 226 of the Constitution of India, petitioner - Telecommunication Service Provider has challenged the constitutional validity of section 200(1) of the Gujarat Panchayat Act, 1993 (hereinafter referred to as "Act, 1993") and to declare section 200(1) of the Act, 1993 as unconstitutional and unenforceable as being inconsistent with Articles 243 H and 265 of the Constitution of India. The petitioner - Telecommunication Service Provider has also prayed for an appropriate writ, direction and order declaring section 200(1)(ia) of the Act, 1993 levying tax on Mobile Towers as unconstitutional and unenforceable as being inconsistent with Articles 243H and 265 of the Constitution of India. The petitioner - Telecommunication Service Provider has also prayed to quash and set aside the impugned demand notice/bills raising demand of tax in respective 17 Mobile Towers as illegal and unconstitutional.

(2.) 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 Act, 1993 (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 Act, 1993 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 v. 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 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 Act, 1993, when the respective Panchayats 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.) 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.