Delhi High Court
Power Grid Corporation Of India vs East Delhi Municipal Corporation ... on 4 April, 2018
IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 04.04.2018
+ W.P.(C) 1461/2013& CM Nos.2767/2013, 2961/2013 &
20639/2017
POWER GRID CORPORATION OF INDIA ..... Petitioner
Versus
EAST DELHI MUNICIPAL CORPORATION
AND ANR ..... Respondents
Advocates who appeared in this case:
For the Petitioner :Mr Parag Tripathi, Senior Advocate with
Mr Pawan Upadhyay, Mr S. Upadhyay, Mr
Rajesh Chhetri, Mr Appoorv Tripathi and
Mr Srinivasan Ramaswamy.
For the Respondents :Ms Pinky Anand, ASG, Mr L. D. Joshi,
Standing Counsel, EDMC and Mr
Sudhamani, Advocates for R-1/EDMC
Ms Madhu Tewatia, Advocate for
Intervener.
WITH
+ W.P.(C) 1372/2014& CM No.22981/2015
DELHI TRANSCO LTD. ..... Petitioner
versus
EAST DELHI MUNICIPAL CORPORATION ..... Respondent
Advocates who appeared in this case:
For the Petitioner :Mr S. K. Dubey, Mr Rajmangal Kumar and
Mr Farhan Ahmed Chazi.
W.P.(C) 1461/2013 & other connected matters Page 1 of 23
For the Respondents :Ms Pinky Anand, ASG, Mr L. D. Joshi,
Standing Counsel, EDMC and Mr
Sudhamani, Advocates for R-1/EDMC.
Mr Rakesh Kumar, CGSC for R-2/UOI.
AND
+ W.P.(C) 2486/2015 & CM Nos.20640/2017 & 36490/2017
POWER GRID CORPORATION OF INDIA
LTD. ..... Petitioner
versus
EAST DELHI MUNICIPAL CORPORATION
AND ORS. ..... Respondents
Advocates who appeared in this case:
For the Petitioner :Mr ParagTripathi, Senior Advocate with
Mr Pawan Upadhyay, Mr S. Upadhyay, Mr
Rajesh Chhetri, Mr Appoorv Tripathi and
Mr Srinivasan Ramaswamy.
For the Respondents :Ms Pinky Anand, ASG, Mr L. D. Joshi,
Standing Counsel, EDMC and Mr
Sudhamani, Advocates for R-1/EDMC.
Ms Madhu Tewatia, Advocate for
Intervener.
CORAM:
HON'BLE MR JUSTICE VIBHU BAKHRU
JUDGMENT
VIBHU BAKHRU, J
1. The petitioners have filed the present petitions, inter alia,
challenging the assessment orders passed by the concerned assessing
authorities assessing Electricity Transmission Towers to property tax
under the Delhi Municipal Corporation Act, 1957 (hereafter „the MCD
Act‟).
2. Power Grid Corporation of India Ltd. (hereafter „PGCIL‟) -
petitioner in W.P.(C) 1461/2013 and W.P.(C) 2486/2015 − is a
Government Company and a "Central Transmission Utility" notified
under Section 38(1) of the Electricity Act, 2003. In W.P.(C)
1461/2013, PGCIL impugns the assessment order dated 02.02.2013
assessing its seven Electricity Transmission Towers located within the
jurisdiction of the respondent (hereafter „EDMC‟) to property tax in
the sum of ₹38,81,48,253/- for the period 01.08.2007 to 31.03.2013. In
W.P.(C) 2486/2015, PGCIL impugns an assessment order dated
25.02.2015 assessing its seven Electricity Transmission Towers to
property tax in the sum of ₹13,66,31,829/- for the financial years
2013-14 and 2014-15. In W.P.(C) 1372/2014, Delhi Transco Ltd. − a
transmission company constituted on unbundling of Delhi Vidyut
Board in terms of Delhi Electricity Reforms and Transfer of Scheme
Rules, 2001 − impugns an assessment order dated 14.02.2014
assessing property tax in the sum of ₹1,77,34,74,818/- in respect of
one hundred and forty Electricity Transmission Towers located within
the jurisdiction of EDMC, for the period of 01.04.2004 to 31.03.2014.
3. These petitions involve a common controversy: whether the
Electricity Transmission Towers are assessable to property tax as
buildings under Section 114A of the MCD Act read with Byelaw 9(1)
of the Delhi Municipal Corporation (Property Tax) Byelaw, 2004
(hereafter „Property Tax Byelaws‟). The petitioners, inter alia,
contend that Electricity Transmission Towers do not fall within the
term „building‟ as defined under Section 2(3) of the MCD Act and,
therefore, such towers are not chargeable to Property Tax under
Section 113(1)(a) of the MCD Act. It is further contended that
Electricity Transmission Towers do not fall within the scope of
„towers‟ as covered under Byelaw 9(l) of the Property Tax Byelaws
and, therefore, there is no machinery provision for assessing property
tax under the Property Tax Byelaws.
4. In view of the above, the principal questions that fall for
consideration of this Court are (i) whether Electricity Transmission
Towers fall within the scope of the definition of „Building‟ under
Section 2(3) of the MCD Act; and (ii) whether Electricity
Transmission Towers are assessable to property tax as "towers" under
Byelaw 9(1) of the Property Tax Byelaws.
5. Briefly stated, the relevant facts necessary to address the
controversy are as under:-
Re: W.P.(C) 1461/2014 and W.P.(C) 2486/2015
6. EDMC issued a notice dated 30.11.2012 to PGCIL alleging
non-submission of property tax returns for the period April 2004 to
March 2013 under the amended provisions of Section 123A and
Section 175 of the MCD Act and the Property Tax Byelaws.
Thereafter, EDMC issued another notice dated 19.12.2012 in respect
of Electricity Transmission Towers (seven in number) located within
the area falling within the jurisdiction of the EDMC. PGCIL
responded to the said notices contending that PGCIL was not covered
under the Property Tax Byelaws. Thereafter, the representatives of
PGCIL also appeared on 11.01.2013 before the Assessment and
Collection Department of EDMC.
7. The concerned Assessor and Collector of EDMC rejected the
contentions advanced by PGCIL. He held that the Electricity
Transmission Towers fall within the scope of Byelaw 9(1) and 14 of
the Property Tax Byelaws, as the Electricity Transmission Towers also
fall within the scope of „towers‟ as defined under Byelaw 9(1) of the
Property Tax Byelaws. The Assessor and Collector proceeded to
assess the property tax on the basis of the area computed by
multiplying the area covered by the extremities at the foundation with
the height of the Electricity Transmission Towers. The annual value of
seven towers was computed at ₹34,15,79,572/- and EDMC raised
property tax bill dated 04.02.2013 for a sum of ₹38,81,48,253/- for the
period 01.04.2004 to 31.03.2013.
8. Thereafter, EDMC issued a notice dated 08.02.2013 for
recovery of the property tax under Section 123A and Section 175 of
the Delhi Municipal Corporation (Amendment) Act, 2003. This was
followed by a show cause notice dated 21.02.2013 under Section
156A of the MCD Act. Thereafter, EDMC proceeded to attach
PGCIL‟s bank account by issuing a notice dated 01.03.2013. This led
the petitioner to file the present petition.
9. By way of W.P.(C) 2486/2015, PGCIL impugns the assessment
order dated 25.02.2015 assessing the property tax in respect of the
seven towers in question of ₹13,66,31,829/- (without penalty and
interest) for the financial years 2013-14 and 2014-15.
Re: W.P.(C) 1372/2014
10. This is a petition filed by Delhi Transco Ltd. (Delhi Transco)
impugning the assessment order dated 14.02.2014 passed in respect of
one hundred and forty Electricity Transmission Towers. EDMC issued
a notice dated 29.12.2012 to Delhi Transco, inter alia, stating that
Delhi Transco has not filed any property tax as required under Section
123A of the MCD Act for the financial years 2004-2005 to 2012-13 in
respect of number of Electricity Transmission Towers located within
the jurisdiction of EDMC. This was followed by another notice dated
08.01.2013, whereby EDMC called upon Delhi Transco to appear
before the concerned officer on 15.01.2013.
11. On 30.01.2013, Delhi Transco submitted details of the
properties within the area falling within the jurisdiction of EDMC.
Thereafter, representatives of Delhi Transco appeared before the
concerned officer of EDMC on 12.02.2013. On 04.04.2013, EDMC
issued a show cause notice, which was responded to by Delhi Transco
by a letter dated 12.04.2013. EDMC issued a second show cause
notice dated 27.05.2013 alleging that there was no plausible
justification shown for non-submission of property tax returns. This
notice was responded to by Delhi Transco, inter alia, contending that
the primary liability for discharging the property tax dues was on the
owner of the immovable property and Delhi Transco was not the
owner of the land in question.
12. EDMC sent another letter dated 27.12.2013 reiterating its stand
that the Electricity Transmission Towers were chargeable to property
tax and, thereafter, the Assessment and Collection Department of
EDMC sent an assessment order dated 14.02.2014 assessing the
property tax payable by Delhi Transco in respect of one hundred and
forty Electricity Transmission Towers at ₹177,34,74,818/- for the
period 01.04.2004 to 31.03.2014.
Submissions
13. Mr Tripathi, the learned Senior Counsel appearing for PGCIL
contended that Electricity Transmission Towers do not fall within the
meaning of the term „building‟ as defined under Section 2(3) of the
MCD Act, stating that the expression "any other structure" as used in
the said definition would necessarily take colour from the preceding
terms, namely, „house‟, „outhouse‟, „stable‟, „latrine‟, „urinal‟, „shed‟
and „hut‟ etc. which included buildings used by human beings and
could not mean structures such as Electricity Transmission Towers,
which were, essentially, sophisticated poles for anchoring the
conductors.
14. Next, he submitted that there was no machinery provision for
assessing the property tax payable in respect of Electricity
Transmission Towers. He referred to Byelaw 9(l) of the Property Tax
Byelaws which defined "towers". He submitted that the Electricity
Transmission Towers will not fall within the scope of "any other
towers", since the same were not erected on the surface or top or any
other open space of a building. He further referred to Section 116E(1)
of the MCD Act and contended that the annual value of a covered
space of a building is a product of the total area of the covered space
and the final base unit area value and since in the present case, there
was no base unit area value determined for the Electricity
Transmission Tower, the same could not be assessed to property tax.
He relied on the decisions of the Supreme Court in Sunil Siddharth
bhai v. Commissioner of Income Tax, Ahmedabad, Gujarat: (1985)
4 SCC 519, Commissioner of Income Tax, Bangalore etc. v. B.C.
Srinivasa Setty, etc.: (1981) 2 SCC 460 and Commissioner of
Income-Tax, Ernakulam, Kerala v. Official Liquidator, Palai,
Central Bank Ltd.: (1985) 1 SCC 45 in support of his contention that
if there was no machinery provision for computing the tax, the charge
itself must fail. Mr Tripathi also contended that so far as the
assessment order dated 02.02.2013 is concerned, the same was barred
by limitation. He relied on the decision of the Division Bench of this
Court in Commissioner of Income-Tax v. NHK Japan Broadcasting
Corporation: (2008) 305 ITR 137 (Del.) as well as the decision of the
Supreme Court in State of Punjab and Ors. v. Bhatinda District
Cooperative Milk Producers Union Ltd.: (2007) 11 SCC 363.
15. Ms Pinky Anand, the learned ASG countered the submissions
advanced on behalf of the petitioners. She referred to the decisions of
the Supreme Court in Ahmedabad Municipal Corporation v. GTL
Infrastructure Ltd. and Ors.: 2017 (3) SCC 545 and contended that
the expression "building" as appearing in Entry 49 of List II of the
Seventh Schedule of the Constitution of India was very wide and
could not be confined to residential buildings, as commonly
understood, or structures raised for the purposes of habitation. She
submitted that in this view, the Electricity Transmission Towers would
fall within the definition of „building‟ as defined under Section 2(3) of
the MCD Act. She also referred to the decision of the Supreme Court
in M.C. Mehta v. Union of India & Ors: (2006) 3 SCC 399 and on
the strength of the observations made in the said decision, contended
that the expression "building" is very wide and encompasses any
structure. She relied on the decision of the Full Bench of this Court in
MCD v. M/s Pradeep Oil Mills Pvt. Ltd.: AIR 2010 Delhi 119 in
support of her contention that the expression "any other structure" as
used in Section 2(3) of the MCD Act, cannot be given a restricted
meaning.
16. She also relied on the decisions of a Coordinate Bench of this
Court in Cellular Operators Association of India & Ors. v. Municipal
Corporation of Delhi: (2011) 179 DLT 381 and the decision of the
Supreme Court in Pradeep Oil Corporation v. Municipal Corporation
of Delhi and Anr.:(2011) 5 SCC 270.
17. Ms Madhu Tewatia, who appears on behalf of North Delhi
Municipal Corporation (the Intervenor) adopted the arguments
advanced by Ms Pinky Anand, the learned ASG.
Reasons and conclusion:
18. The first and foremost question to be addressed is whether the
Electricity Transmission Tower is a „building‟ as defined under
Section 2(3) of the MCD Act? Section 2(3) of the MCD Act is set out
below:-
"2(3) "building" means a house, out-house, stable, latrine,
urinal, shed, hut, wall (other than a boundary wall) or any
other structure, whether of masonry, bricks, wood, mud,
metal or other material but does not include any portable
shelter."
19. The contention that the expression "any other structure" must
take colour from the preceding terms, namely, house, out-house,
stable, latrine, urinal, shed and hut, and by applying the doctrine of
ejusdem generis, is persuasive at the first blush. The expression "any
other structure" cannot be read to mean any structure, which is not
used for the purposes of habitation or storage or for attendant purposes
thereto. A house, out-house, stable, latrine, urinal, shed and hut are all
used either for human inhabitation or for other activities or in
connection therewith. House and out-house and a hut are used for
human inhabitation; a shed is used in connection with the activities
carried out by human beings or as a storage; a stable is used to house
horses; and a latrine and a urinal are also clearly a building for human
purposes. In view of the same, the contention that the expression "any
other structure" could not take within its ambit Electricity
Transmission Towers appears attractive. This is also the prima facie
view expressed by the Division Bench of this Court in Power Grid
Corporation of India v. East Delhi Municipal Corporation and Anr.:
LPA No. 161/2013, decided on 18.03.2013 (this was an appeal
preferred by PGCIL against an interim order passed in W.P.(C)
1461/2013).
20. However, in the said decision, the Division Bench had also
noted the contention of the learned Attorney General advanced on
behalf of PGCIL that the word "structure", as used in Section 2(3) of
the MCD Act, "should be read ejusdem generis with the word
"house", "out-house", etc. which precede the word "structure" in the
sub-Section, particularly, when the definition given in the sub-Section
is exhaustive and not inclusive". The Court had, thereafter, referred to
the decision of the Full Bench of this Court in Municipal Corporation
of Delhi v. Pradeep Oil Mils P. Ltd.: AIR 2010 Delhi 119 and the
decision of the Division Bench of this Court in United Taxi Operators
Co-operative (Urban) Thrift & Credit Society Ltd. and Anr. v.
Municipal Corporation of Delhi: (2) 1966 DLT 281 (DB) and had
observed that "considering the decisions referred earlier by us, it
would be difficult for us to outrightly accept the contention of the
learned Attorney General".
21. In Pradeep Oil Mills (supra), the Full Bench of this Court had,
inter alia, considered the question "Whether the erection of storage
tanks on the lands in question amounts to erection of a building which
is taxable under the Delhi Municipal Corporation Act?"The Court
referred to the decision of the Supreme Court in Municipal
Corporation of Greater Bombay & Ors. v. Indian Oil Corporation
Ltd.: AIR 1991 SC 686, wherein the Court had held that the Oil Tanks
made for storage and petroleum products would be covered under the
definition of the word "building", and held that the definition of
expression "building" in terms of Section 2(3) of the MCD Act was of
a very wide import and it encompassed "any other structure".
22. In M.C. Mehta v. Union of India and Ors (supra), the Supreme
Court had observed that the definition of the term "building" in
Section 2(3) of the MCD Act shows that "it is very wide and
encompasses any other structure only excluding portable
shelter......".
23. As stated above, the contention that the words "any other
structure" must take colour from the preceding terms appears to be
attractive. However, in view of the decision of the Full Bench of this
Court in MCD v. Pradeep Oil Mills (supra), the words "any other
structure" cannot be given a restrictive meaning even though the
Electricity Transmission Towers would not be considered as building
in common parlance.
24. In Cellular Operators Association of India and Ors. v.
Municipal Corporation of Delhi (supra), a Coordinate Bench of this
Court, while considering the question whether mobile towers are a
building, observed as under:-
"40. I am however firmly of the view that the said towers
definitely fall within the definition of "building" which
includes within its ambit a structure of metal or other
materials. What else is a tower but a metallic structure.
The contention of the senior counsels for the petitioners
that a building has to be necessarily a house/habitable
cannot be accepted."
25. In view of the clear observations made by the Full Bench of this
Court in MCD v. Pradeep Oil Mills (supra) as well as the Coordinate
Bench of this Court in Cellular Operators Association of India and
Ors. v. Municipal Corporation of Delhi (supra), this Court is unable
to accept the contention that the words "any other structure" as used in
Section 2(3) of the MCD Act must be read ejusdem generis with the
preceding terms. Undisputedly, if the term "any other structure" is
read in a disjunctive manner, it would include the Electricity
Transmission Towers as well since the same are, indisputably,
structures and are made of metal and other material.
26. The next question that needs to be addressed is whether the
MCD Act and the Property Tax Byelaws provide any machinery
provisions for levy and computation of tax on Electricity Transmission
Towers.
27. Chapter VIII of the MCD Act contains provisions for taxation.
Section 113 provides for the taxes to be levied by a Corporation.
Section 113(1)(a) specifically provides for levy of „property taxes‟.
Section 114 of the MCD Act provides that the property tax shall be
levied on lands and buildings in Delhi and shall consist of (a) building
tax and, (b) vacant land tax.
28. Section 114A of the MCD Act specifies that a building tax shall
be equal to the rate of building tax as may be prescribed by a
Corporation under Section 114D of the MCD Act multiplied by the
annual value of the covered space of a building determined under sub-
Section (1) of Section 116E or Section 116F of the MCD Act.
29. Section 116 of the MCD Act provides for constitution of a
Municipal Valuation Committee. In terms of Section 116(5) of the
MCD Act, the functions of such Municipal Valuation Committee are
to make recommendations on matters relating to classification of
vacant lands and buildings and fixation of the base value per unit area
of vacant land or per unit area of covered space of a building. Section
116A(1) of the MCD Act mandates that the Municipal Valuation
Committee shall recommend the classification of the vacant lands and
buildings in any ward of Delhi into colonies and groups of lands and
buildings after taking into account the parameters as indicated therein.
30. Section 116B of the MCD Act provides for notification of the
classification of vacant lands and buildings into colonies and groups as
well as the specification of the base unit area value thereof. Section
116C of the MCD Act provides for the procedure for hearing
objections to the classification of vacant lands and buildings into
various colonies and groups or the fixation of the base value per unit
area of vacant land or covered space of a building in any group.
Section 116D(1) of the MCD Act, inter alia, provides that the base
unit area value of covered space of a building in any group as
specified under Section 116C(3) of the MCD Act would be final.
31. Section 116E provides for determination of the annual value of
a covered space of a building and of a vacant land. Section 116E(1) of
the Act reads as under:-
"116E(1) The annual value of any covered space of
building in any ward shall be the amount arrived at by
multiplying the total area of such covered space of
building by the final base unit area value of such covered
space and the relevant factors as referred to in clause (b)
of sub-section (2) of section 116A.
Explanation−"covered space", in relation to a
building, shall mean the total floor area in all the floor
thereof, including the thickness of walls, and shall include
the spaces of covered verandah and courtyard, gangway,
garrage, common service area, staircase, and balcony
including any area projected beyond the plot boundary
and such other space as may be prescribed."
32. It is apparent from the plain reading of the provisions as
mentioned above that the annual value of any covered space of a
building is the value arrived at by multiplying the total area of covered
space of the building by the final base unit area value as may be
adjusted by other factors. Thus, for the building tax to be computed, it
is necessary to ascertain (a) the covered space of the building; and (b)
the "final base unit area value".
33. In exercise of powers under Section 481 of the MCD Act, the
Municipal Corporation of Delhi has framed the Delhi Municipal
Corporation (Property Taxes) Bye-laws, 2004.
34. Bye-law 9 of the Property Tax Byelaws provides for the use-
wise category of buildings for the purpose of Clause (f) of Section
116A(1) of the MCD Act. In terms of Byelaw 9, the buildings have
been categorized as (a) residential building; (b) business building; (c)
mercantile building; (d) building for recreation and sports purposes;
(e) industrial building; (f) hazardous building, (g) hospital and nursing
home; (h) education buildings; (i) public purpose; (j) farmhouse; (k)
star hotels; (l) towers; and (m) hoardings.
35. Clause (l) of Byelaw 9 which categorizes certain buildings as
towers is set out below:-
"9(l) "towers" shall include TV towers, cable towers,
telecom towers or any other tower erected on the surface
or top or on any other open space of a building;"
36. According to EDMC, Electricity Transmission Towers fall
within the category of towers as specified under Byelaw 9(l) of the
Property Tax Byelaws.
37. A conjoint reading of Section 116A of the MCD Act read with
Byelaw 9 of the Property Tax Byelaws clearly indicates that the
Municipal Valuation Committee is required to recommend
classification of buildings in any ward of Delhi into colonies and
groups after taking into accounts the use-wise category of such
buildings. Thus, if a building falls outside the scope of Byelaw 9 of
the Property Tax Byelaws, the classification of such building into any
groups of buildings would be flawed.
38. It is relevant to note that it was readily conceded on behalf of
EDMC that Electricity Transmission Towers do not fall under any
other category as specified under Byelaw 9 of the Property Tax
Byelaws. Thus, the limited question to be addressed at this stage is
whether Electricity Transmission Towers falls within the category of
„towers‟ as defined under Byelaw 9(l) of the Property Tax Byelaws.
39. Before proceeding to address the aforesaid question, it would be
relevant to observe that there was no dispute that Electricity
Transmission Towers have to be constructed in accordance with the
relevant Electricity Rules. It is not disputed on behalf of EDMC that
such towers require to have a vertical clearance of approximately 7-8
meters and a minimum horizontal clearance of approximately 7-8
meters from any buildings or part of the buildings over which or
adjacent to which the conductors pass. It has also been asserted on
behalf of the petitioners that the Electricity Transmission Towers are
built to support the conductors that facilitate transmission of
electricity. Whereas, an average weight of a TV/Cable/Telecom tower
is about 10 tons, the average weight of an Electricity Tower is 60 to 80
tons and, therefore, it is not feasible to install the same on the top of
any building.
40. Bearing the aforesaid in mind, it is apparent that the
Telecom/TV Towers are not by their very nature comparable with
Electricity Transmission Towers, even though both the towers may be
erected by metal and other material. The nature, the purpose and the
construction of the towers are different.
41. A plain reading of Byelaw 9(l) of the Property Tax Byelaws
classifies towers into four categories: (i) TV Towers; (ii) Cable
towers; (iii) Telecom Towers; and (iv) any other tower erected on the
surface or top or any other open space of a building. Concededly, the
Electricity Transmission Towers do not fall within the first three
categories. It was earnestly contended on behalf of EDMC that the
Electricity Transmission Towers are squarely covered as within the
scope of the expression "any other tower erected on the surface or top
or on any other open space of a building". This Court finds the said
contention to be unpersuasive, as Electricity Transmission Towers are
standalone towers and are not erected on the surface or top or any
other open space of a building.
42. Ms Pinki Anand contended that since the towers by themselves
are buildings within the meaning of Section 2(3) of the MCD Act, it is
not necessary that the said towers be constructed on top or any other
open space of a building for being classified as towers. This
contention is also unmerited, as in order for a tower to fall under the
fourth category − that is, any other tower erected on the surface or top
or on any open space of a building − it is necessary that the tower be
constructed in conjunction with another building; either on the surface
or on top or in any other open space of the said building.
43. As noticed above, the applicable property tax in respect of a
building is a product of the area covered space of the building and the
final base unit area value of such covered space. Thus, in computing
the property tax, it is necessary to determine the said two variables
namely, (a) the covered space; and (b) the final unit area value.
44. As noticed above, the unit area value can be recommended
under Section 116A of the MCD Act only after taking into account the
use-wise categories. If the Electricity Transmission Towers are not
included in the use-wise categories as provided under Byelaw 9 of the
Property Tax Byelaws, it would not be possible to determine any base
rate value of such buildings.
45. The Second variable to be determined is the covered area. There
does not appear to be any statutory defined method of determining
such covered area as well. Explanation to Section 116E(1) of the
MCD Act provides for a definition of the expression "covered space"
in relation to a building to mean "the total floor area in all the floor
thereof including thickness of walls and shall include spaces of
covered verandah and courtyard, gangway, garrage, common service
area, staircase, and balcony including any area projected beyond the
plot boundary and such other space as may be prescribed". Clearly,
explanation "covered space" is inadequate in case of Electricity
Transmission Towers inasmuch as there is no floor area covered by
the towers. Thus, in absence of any machinery provision to determine
the covered space, it is not possible to determine the building tax
payable on such buildings.
46. At this stage, it is relevant to refer to Byelaw 14 of the Property
Tax Byelaws which reads as under:-
"14. Other spaces to be included in covered space
in relation to building. −In addition to the covered
spaces specified in the Explanation to sub-section (1) of
section 116 E, the covered space in relation to a building
shall also include basements, mezzanine floors, barsatis
and stilts meant for parking and TV/Telecom towers and
hoardings erected on the surface or top or any other open
space of a building.
Explanation.−In case of buildings with common
areas/services shared by more than one owner/occupant,
it shall be divided proportionately according to the
covered area enjoyed by the owner/occupier. A fire
escape (staircase) added subsequently to a building, loft
floor, refuse areas in multi-storeyed buildings, shall not
be counted towards covered area calculation. In the case
of TV /Telecom and other such towers, the covered area
shall include the area covered by the extremities of
foundation multiplied by the total height, while in the
case of hoarding, covered area shall mean the square of
extremities of the poles on which hoardings are erected
plus the area of the hoarding."
47. A plain reading of the aforesaid Byelaw indicates that in case of
TV/Telecom Towers and hoardings erected on "surface or top or any
other open space of a building", the covered space shall be included in
the covered space of the building. The Explanation to Byelaw 14 of
the Property Tax Byelaws provides for the manner of calculating such
covered space in case of "TV/Telecom and other such towers".
48. It is at once clear that a machinery provision has been provided
for calculation of TV/Telecom towers and other such towers, which
are erected on the surface or top or any other open space of a building
and the methodology is to club the covered space of such towers with
that of the building and apply final base unit area value. Plainly, there
is no mechanism to determine the covered space in relation to a
standalone Electricity Transmission Tower, which is neither erected
on the surface or top of a building nor in an open space adjacent to any
building connected with such tower.
49. In view of the absence of any machinery provision to determine
the measure of property tax, the charge itself must fail.
50. In B.C. Srinivasa Setty (supra), the Supreme Court had
considered the question of levy of capital gain tax on sale of goodwill
of a business. Although, admittedly, goodwill of a business is an asset;
however, the machinery provision for computing capital gains
required that the cost of the asset be deducted from the sale
consideration. Since there was no cost that could be quantified for
acquisition of the asset of goodwill, the machinery provisions for
calculating the capital gains on sale of a goodwill were found wholly
inadequate. In this context, the Supreme Court held as under:-
"Thus the charging section and the computation
provisions together constitute an integrated code. When
there is a case to which the computation provisions
cannot apply at all, it is evident that such a case was not
intended to fall within the charging section. Otherwise
one would be driven to conclude that while a certain
income seems to fall within the charging section there is
no scheme of computation for quantifying it."
51. In the present case, the machinery provisions have not been
enacted for computing the property tax on Electricity Transmission
Towers and, therefore, the assessments framed in this regard must also
fail.
52. It is also trite law that taxation laws must be strictly considered.
In Banarsi Debi & Anr. v. Income Tax Officer, Calcutta & Ors. :
AIR 1964 SC 1742, the Supreme Court held as under:
"6. Before construing the section it will be useful to
notice the relevant rules of construction of a fiscal statute.
In Oriental Bank v. Wright (1880) 5 A.C. 842, 856 the
Judicial Committee held that if a statute professed to
impose a charge, the intention to impose a charge upon a
subject must be shown by clear and unambiguous
language. In Canadian Eagle Oil Co. v. R., [1946] A.C.
119, 140 Viscount Simon L.C. observed:
"In the words of Rowlatt J...............................in
a taxing Act one has to look at what is clearly
said. There is no room for any intendment.
There is no equity about a tax. There is no
presumption as to a tax. Nothing is to be read
in, nothing is to be implied. One can only look
fairly at the language used."
In other words, a taxing statute must be couched in
express and unambiguous language. The same rule of
construction has been accepted by this Court in Gursahai
Saigal v. Commissioner of Income-tax, Punjab (1963) 48
ITR (SC) 1, wherein it was stated:
"It is well recognized that the rule of
construction that if a case is not covered within
the four corners of the provisions of a taxing
statute, no tax can be imposed by inference or by
analogy or by trying to probe into the intentions
of the legislature and by considering what was
the substance of the matter applies only to a
taxing provision has no application to all
provisions in a taxing statute.........""
53. In view of the above, the petitions are allowed and the
impugned assessment orders are set aside. The pending applications
also stand disposed of.
VIBHU BAKHRU, J
APRIL 04, 2018
RK
