Madras High Court
M/S.Reliance Communications Ltd vs The State Of Tamil Nadu on 17 June, 2021
W.P.Nos.2084 of 2010 etc., batch
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 17.06.2021
CORAM
THE HONOURABLE MR.JUSTICE S.M. SUBRAMANIAM
W.P.Nos.2084, 2086, 2088, 2089, 2092,
2093, 2094, 2096, 2097 & 2098 of 2010
and
M.P.Nos.1, 1, 1, 1, 1, 1, 1, 1, 1 & 1 of 2010,
1, 1 & 1 of 2011
W.P.No.2084 of 2010 :-
M/s.Reliance Communications Ltd.,
Rep., by its Power of Attorney, N.Seshadri,
Having its registered office at 'H' Block,
1st Floor, Dhirubhai Ambani Knowledge City,
Navi Mumbai 400 710 and having its
Local office at Reliance House,
No.6, Haddows Road, Nungambakkam,
Chennai-600 006. .. Petitioner
-vs-
1.The State of Tamil Nadu,
Rep., by its Secretary,
Department of Municipal Administration
and Water Supply,
Fort St., Goerge, Chennai-600 009.
2.The Secretary,
Information Technology Department,
1/22
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W.P.Nos.2084 of 2010 etc., batch
Government of Tamil Nadu,
For St., George, Chennai-600 009.
3.Soorampatti Municipality,
Rep., by its Executive Officer,
Surampatti, Erode District-11. .. Respondents
Petition under Article 226 of the Constitution of India praying for
issuance of Writ of Certiorari to call for the records pertaining to the notice
dated 14.10.2009, in proceedings bearing Na.Ka.No.745/09 A2, on the file
of the 3rd respondent herein demanding tax on Base Transreceiver Station
Tower of the petitioner and quash the same.
For Petitioner : Mr.J.Ravikumar
(In all W.Ps.)
For RR1 & 2 : Mr.V.Nanmaran,
(In all W.Ps.) Government Advocate
For R3 : Mr.M.Raja Madhivanan
(In W.P.No.2084/2010)
For R3 : Mr.S.Sounthar
(In W.P.No.2086/2010)
For R3 : Mr.R.Neelakandan
(In W.P.No.2088/2010)
For R3 : No appearance
(In W.P.No.2089/2010)
For R3 : No appearance
(In W.P.No.2092/2010)
2/22
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W.P.Nos.2084 of 2010 etc., batch
For R3 : Mr.A.Arumugam
(In W.P.Nos.2093, 2096 & 2098/2010)
For R3 : No appearance
(In W.P.No.2094/2010)
For R3 : No appearance
(In W.P.No.2097/2010)
******
COMMON ORDER
All these writ petitions are filed challenging the demand notices for
payment of property tax for the Base Transreceiver Station Towers (BTS
Towers) erected by the petitioner-company.
2.Admittedly, the petitioner had erected BTS Towers in many
locations strategically to provide service to the public at large more
specifically, to operate mobile phones, internet etc.
3.The learned counsel appearing on behalf of the petitioner
strenuously contended that the third respondent has no jurisdiction to levy
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property tax, as the erection of BTS Towers cannot be termed as a building
within the meaning of the statutes, nor there is any specific provision under
the Act or Rules regulating these BTS Towers. Thus, the third respondent
cannot suo motu regulate his powers in the absence of any provisions under
the Act and Rules and consequently, the impugned demand of property tax
is void, ab initio and liable to be set aside.
4.The petitioner states that in the State of Gujarat, Local Authorities
Laws were amended and suitable provisions were made to regulate these
BTS Towers and property tax was collected and the said position was
confirmed by the Hon'ble Supreme Court of India in a batch of cases.
However, the facts are different in the State of Tamil Nadu and no such
amendments are made in the statutes and in the absence of any such
provision, it cannot be appropriate on the part of the authorities to collect
property tax more specifically, from the petitioner-company, who are only
service provider and not the owner of the property. In other words, it is
contended that the owners of the property are liable to pay property tax and
the petitioner-company, being not the owner of the property and
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commissioning only the BTS Towers, are not liable to pay property tax to
the local authorities.
5.In respect of the said contention, the learned counsel for the
petitioner cited a judgment of the Hon'ble Supreme Court of India in the
case of Ahmedabad Municipal Corporation vs. GTL Infrastructure Ltd.,
& Ors (2017) 3 SCC 545 wherein, the Hon'ble Supreme Court considered
the amended provisions of the Gujarat Local Authorities Laws and observed
as follows:-
“10.Section 145A (inserted by the Gujarat Local
Authorities Laws (Amendment) Act, 2011) provides for
tax on mobile towers at rates not exceeding those
prescribed by order in writing by the State Government.
Such tax which is levied on mobile towers is to be
collected from persons engaged in providing
telecommunication services through service towers.
Section 145A is in the following terms:-
145A Tax on mobile towers:-
(1) A tax at the rates not exceeding those
prescribed by order in writing by the State
Government in this behalf from time to time shall
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be levied on mobile towers from the person
engaged in providing telecommunication services
through such mobile towers.
(2) The Corporation shall from year to year,
in accordance with Section 99, determine the rates
at which the tax shall be levied.
11.By the aforesaid Gujarat Local Authorities Laws
(Amendment) Act, 2011 similar provisions for levy of tax
on mobile towers have been inserted in the Gujarat
Municipalities Act, 1963 and also the Gujarat Panchayats
Act, 1993.”
6.Relying on the above observations of the Hon'ble Supreme Court,
the learned counsel for the petitioner reiterated that no similar provisions
are made available either in the Tamil Nadu District Municipalities Act,
1920 (hereinafter referred to as “the 1920 Act”) or in the Tamil Nadu
Panchayats Act, 1994 (hereinafter referred to as “the 1994 Act”) in the State
of Tamil Nadu and therefore, levy of property tax on the petitioner-company
is impermissible, as the said BTS Towers cannot be construed as building so
as to recover property tax.
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7.The learned counsel for the petitioner solicited the attention of this
Court with reference to various provisions regulating the levy of property
tax and its assessment as well as the procedures contemplated and made a
submission that none of these provisions clarify that these BTS Towers are
covered under the procedures or the method of assessment and in the
absence of any such reflection in any of the provisions, the property tax
demanded by the third respondent is untenable.
8.The respective learned counsel appearing on behalf of the
respondents disputed the said contention by stating that on an application
from the petitioner-company, licence was granted for erection of BTS
Towers for business activities. Admittedly, the petitioner-company have
commissioned the BTS Towers for their business activities and services are
provided to the public at large more specifically, for usage of mobile
phones, internet etc. This being the nature of business activity, the
petitioner-company are liable to pay tax to the local authorities, since the
respective Local Body passed a resolution granting permission and
consequently, licences were issued to run the business activity in a
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particular building or in a land by constructing the BTS Towers. In view of
the fact that the nature of business is independent and the BTS Towers are
wholly owned by the petitioner-company, for all purposes, they have
become the owner of the property, viz., the BTS Towers and therefore, they
are liable to pay property tax. This apart, the annual value derived from and
out of the BTS Towers is capable of assessing the petitioner-company and
therefore, the local authorities have assessed the annual value derived from
the business activity done through such BTS Towers and consequently,
assessed the tax and made a demand to pay the same. Thus, there is no
irregularity as such.
9.The learned counsel for respondents 1 and 2 referred to Section 3(3)
of the 1920 Act wherein, “building” is defined. 'Building' is defined so as to
cover all such affixtures including the BTS Towers. For the BTS Towers
erected by the petitioner either in a vacant land or in a terrace of a concrete
building or in any other locality wherever it is possible to erect such BTS
Towers, permission is being granted by the local authority to erect such
BTS Towers. Some BTS Towers are erected in a building belongs to the
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petitioner and some BTS Towers are erected by entering into a sale
agreement with the original owners of the vacant land or the building. In
either of the case, there was an agreement between the original owner and
the petitioner for commissioning of the BTS Towers and to conduct
business activity. In both the cases, the lease agreement itself is for
commissioning of the BTS Towers and running the business activity.
Commissioning of BTS Towers is not done by the original owner of the
property, but by the petitioner, who have obtained lease permission or
otherwise for commissioning of BTS Towers and by commissioning BTS
Towers, they are conducting the business activities. Thus, the nature of
activity between the original owner as well as the petitioner cannot be
compared with the normal rental agreement. The clauses are independent
and the BTS Towers erected are wholly owned by the petitioner-company
and without their permission, even the original owners have no right to
dismantle or deal with such towers and this being the nature of agreement
between the petitioner and the original owner, the local authorities formed
an opinion that if it is a commission in a property belongs to some other
person, the land in which the tower is erected is to be treated as an
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independent property, as the ownership vest with the petitioner-company to
commission the BTS Towers and under those circumstances, property tax
cannot be levied on the original owners, as they are not the owners of the
BTS Towers erected.
10.Considering the complex nature of construction of the BTS
Towers in a property belongs to a third person, the authorities competent
made two assessments in one case for the building in which the tower is
erected and another for the BTS Tower; and in other case for the land of the
original owner and another for the tower erected. In either of the
circumstances, the fact remains that the petitioner became the absolute
owner of the BTS Towers constructed. They retain their right of ownership
all along till it is dismantled either on expiry of the agreement or as per the
terms and conditions of the lease.
11.This being the nature of business activity being carried on by the
petitioner, let us now consider the definition of 'building' in the 1920 Act.
Section 3(3) defines 'building', which includes a house, out-house, stable,
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latrine, shed, hut, wall (other than a boundary wall not exceeding eight feet
in height) and any other such structure, whether or masonry, bricks, wood,
mud, metal or any other materials whatsoever. 'Building' is defined in a
wider manner so as to cover all the pictures in a building for the purpose of
assessing the annual value and for the purpose of determining the property
tax to be recovered. The value of the building is to be assessed in
connection with all facts and circumstances which all are capable of
valuation. In the present case, the BTS Towers are erected by the
petitioner-company and the ownership of the towers is exclusively retained
by the petitioner-company. Under those circumstances, this Court is of the
opinion that the BTS Towers are capable of being valued independently and
there is no error as such in valuing the BTS Towers in an independent
manner.
12.Section 81 of the 1920 Act provides “description and classes of
property tax”. Sub-Section (1) of Section 81 stipulates that if the Council
by resolution determines that a property tax shall be levied, such tax shall be
levied on all buildings and lands within municipal limits save those
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exempted by or under the Act or any other law. Thus, the property tax shall
be levied on all the buildings and lands within municipal limits.
13.Section 86 of the 1920 Act states “property tax when payable”.
The property tax shall be levied every half-year and shall, save as otherwise
expressly provided in Schedule IV, be paid by the OWNER of the assessed
premises within thirty days after the commencement of the half year.
14.Section 124I of the 1920 Act denotes “appeal” to be preferred by
an aggrieved person. Sub-Section (1) of Section 124I enumerates that “any
person or employer aggrieved by any order or decision of the Executive
Authority in relation to the payment of tax (including penalty, fee and
interest) may, within such time as may be prescribed appeal to the Taxation
Appeals Committee”. Sub-Section (2) of Section 124I contemplates that
the decision of the Taxation Appeals Committee shall be final and shall not
be questioned in any Court of law. Proviso to Section 124I provided that no
such decision shall be made except after giving the person affected a
reasonable opportunity of being heard. Thus, the Taxation Appeals
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Committee is the authority before whom the petitioner ought to have gone
for redressal of their grievances. However, the learned counsel for the
petitioner made a submission that there is no provision to charge property
tax on the petitioner who all are not the owner of the property. In other
words, there is no legal authority for the third respondent to issue the
demand notices and thus, they have chosen to file the writ petitions.
15.This Court in W.P.Nos.21040 to 21044 of 2010 has considered
similar issue and passed on order dated 16.04.2021 and the relevant
paragraphs are extracted hereinbelow:-
“4.The writ petitioners have raised a point that
the BTS Towers installed are not 'building' within the
meaning of CCMC Act, 1919. However, the issue, in this
regard, is settled by various High Courts. It is relevant
to extract Section 3(4) of CCMC Act, 1919, which
defines 'Building' as under:-
“Building.--- “Building” includes ---
(a) A house, out-house, stable, latrine, godown,
shed, hut, wall (other than a boundary wall not
exceeding eight feet in height) and any other structure
whether of masonry bricks, mud, wood, metal or any
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other material whatsoever ;
(b) A structure on wheels or simply resting on the
ground without foundations; and
(c) A ship, vessel, boat, tent, van and any other
structure used for human habitation or used for keeping
or storing any article or goods.”
5.Accordingly, any superstructure whether be
constructed by bricks, mud, metal or any other material
is a 'Building'.
6.The Cell Phone Towers are the metal structure
erected either on the 'land' or the 'Building' or on the
'Concrete Building' and the foundation bed to the Tower
is constructed and on the foundation, the Towers are
erected. Thus, the Cell Phone Towers are falling within
the scope of the definition of 'Building' as defined under
Section 3(4) of the CCMC Act, 1919.
7.When the BTS Towers are falling under the
definition of 'Building', then the Corporation is
empowered to levy property tax by determining the same
and by following the procedures contemplated under the
relevant provisions of the CCMC Act, 1919.
8.The grievances of the writ petitioners are that
no such procedures, as contemplated, were followed and
an unilateral decision was taken without providing
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opportunity to the writ petitioners and further, a
standard tax of Rs.15,000/- is fixed for all the Cell
Phone Towers, which is improper.
9.Thus, the Authorities Competent are bound to
follow the relevant provisions of the CCMC Act, 1919
for assessment and determination of property tax. The
procedures contemplated are to be followed
scrupulously by providing opportunity to the assessees
and in this regard, the impugned order is non-speaking
and therefore, the respondentCorporation had not
followed the principles of natural justice and passed an
order without adhering the mandatory procedures
contemplated under the relevant provisions of the
CCMC Act, 1919.
10.This being the lapses committed by the
respondentCorporation, they are bound to follow the
procedures contemplated and thereafter, determine the
property tax to be collected and communicate the said
order to the respective assessees, who in turn is liable to
pay the same. In view of the fact that the order impugned
is passed in violation of the relevant provisions of the
Act and in violation of the principles of natural justice,
all these writ petitions are to be considered.”
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16.As far as the writ petitions on hand are concerned, the facts are not
similar. In certain cases, the cell phone towers are constructed in a concrete
building and in certain cases, in a vacant land and otherwise. Thus, the
ownership or otherwise are to be decided based on the particular facts and
circumstances prevailing. Undoubtedly, the owners of the properties are
liable to pay property tax under the 1920 Act. The owner is liable to pay
property tax and in the event of non-payment of property tax by the owner,
the procedures to be followed for recovery of property tax, are to be
considered with reference to the facts and circumstances of each case and
such facts are to be established by filing documents and evidences before
the appellate authority. Such a rowing enquiry cannot be conducted under
Article 226 of the Constitution of India. As far as the payment of property
tax is concerned, the provisions of the 1920 Act are unambiguous that the
property tax is to be paid by the owner of the property and in the event of
non-payment by the owner, procedures are contemplated for recovery of tax
dues under Section 344 of the 1920 Act. Therefore, the question of facts are
to be established by the writ petitioner with reference to the cell phone BTS
towers constructed and operated.
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17.This Court is of the considered opinion that without adjudicating
the factual matrix, in all these writ petitions, recovery may not be possible.
The writ petitioner claims that they are not the owner of the property. As
stated in the aforementioned paragraphs, the 1920 Act contemplates
definition for “building” and the judgments cited supra also reveal the
meaning for “building”. However, whether the particular BTS towers are
falling within the meaning or not and the ownership regarding the towers
constructed are to be adjudicated by the competent appellate authority with
reference to the documents and evidences available. Exhausting the
appellate remedy is of paramount importance in these cases.
18.High Court cannot go into the disputed facts and circumstances
which all are to be established with reference to the documents and
evidences. However, payment of property tax cannot be disputed and in the
present case, the petitioner claims that they are not the owner of the property
however, admitted that they have constructed BTS towers by entering into
lease agreements with the owners of the properties. The factor to be
ascertained as to whether the ownership is retained by the person or not is a
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fact to be enquired into. If that is so, then alone the authority competent
shall be in a position to form an opinion, who is the owner of the property
within the meaning of the provisions of the 1920 Act and thereafter, shall
recover the property tax dues. Even a person claims that he is a tenant, then
also the procedures are to be followed for recovery.
19.As per the provisions, owner is liable to pay property tax at the
first instance and the mode of recovery of dues is also contemplated under
the 1920 Act. Considering the provisions of the 1920 Act, this Court is of
an opinion that exhausting the appellate remedy with reference to the
disputed facts are certainly imminent and therefore, the petitioners are
bound to prefer an appeal before the Taxation Appeals Committee under
Section 124I of the 1920 Act and under the relevant provisions of the 1994
Act.
20.The Statutes provide appeal for an aggrieved person. The
appellate remedy is not only efficacious, but they are empowered to call for
the original files, provide opportunity to the parties concerned, adjudicate
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the mixed question of fact and law and pass an order. Such a valuable
opportunity for an aggrieved person need not be dispensed with by the High
Court in a routine manner. Exhausting the appellate remedy is the rule.
Entertaining a writ petition is only an exception. Even in respect of the
legality of the notice, an aggrieved person is entitled to raise the legal
grounds as well as the factual aspects. When such being the scope of the
appeal to be preferred before the Taxation Appeals Committee, the High
Court need not entertain a writ petition at the initial stage and the aggrieved
persons must be allowed to exhaust the appellate remedy which has got
significance and relevance in the matter of adjudication of disputed facts
and circumstances.
21.The power of judicial review under Article 226 of the Constitution
of India is to scrutinise the processes through which the decision is taken by
the competent authority by following the provisions of law and not the
decision itself. Therefore, the High Court may not be in a position to give
an effective finding in respect of such disputed facts in a writ proceedings.
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22.Under these circumstances, this Court is of an opinion that
property tax is to be recovered from the owner of the property and the
ownership or otherwise are to be decided based on the facts of each case
with reference to the provisions of the statutes.
23.With the above observations, the writ petitioner is at liberty to
approach the appellate authorities under the provisions of the 1920 Act
within a period of four weeks from the date of receipt of a copy of this order
an on receipt of any such appeal from the aggrieved person, the appellate
authority shall entertain the same, adjudicate the issues and pass orders on
merits and in accordance with law and by affording opportunity to all the
parties.
24.With the above observations, these writ petitions stand disposed
of. No costs. Consequently connected miscellaneous petitions are closed.
17.06.2021
Index : Yes/No
Speaking Order :Yes/No
abr
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W.P.Nos.2084 of 2010 etc., batch
To
1.The Secretary to Government,
The State of Tamil Nadu,
Department of Municipal Administration
and Water Supply,
Fort St., Goerge, Chennai-600 009.
2.The Secretary,
Information Technology Department,
Government of Tamil Nadu,
For St., Goerge, Chennai-600 009.
3.The President,
Panapakkam Panchayat,
Thiruvalangadu, Thirutani Taluk,
Thiruvallur District.
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W.P.Nos.2084 of 2010 etc., batch
S.M.Subramaniam, J.
(abr)
W.P.Nos.2084, 2086, 2088, 2089, 2092,
2093, 2094, 2096, 2097 & 2098 of 2010
17.06.2021
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