Gujarat High Court Case Information System
Print
SCA/1898/2009 32/ 32 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 1898 of 2009
With
SPECIAL
CIVIL APPLICATION No. 1566 of 2009
With
SPECIAL
CIVIL APPLICATION No. 2019 of 2009
With
SPECIAL
CIVIL APPLICATION No. 799 of 2009
With
SPECIAL
CIVIL APPLICATION No. 1696 of 2009
With
SPECIAL
CIVIL APPLICATION No. 4259 of 2009
With
SPECIAL
CIVIL APPLICATION No. 5170 of 2009
With
SPECIAL
CIVIL APPLICATION No. 9204 of 2009
With
SPECIAL
CIVIL APPLICATION No. 9205 of 2009
With
SPECIAL
CIVIL APPLICATION No. 2024 of 2009
For
Approval and Signature:
HONOURABLE
MR. JUSTICE D.A.MEHTA
HONOURABLE
MS. JUSTICE H.N.DEVANI
=========================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To
be referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================
INDUS
TOWERS LTD. – Petitioner(s)
Versus
STATE
OF GUJARAT & 1 – Respondent(s)
=========================================
Appearance
:
MR SHALIN N
MEHTA for
Petitioner(s) : 1,
MR PK JANI, GOVERNMENT PLEADER with MS MYTHILI
MEHTA, ASSISTANT GOVERNMENT PLEADER for Respondent(s) : 1 – 2.
NOTICE
SERVED for Respondent(s) :
2,
=========================================
CORAM
:
HONOURABLE
MR. JUSTICE D.A.MEHTA
and
HONOURABLE
MS. JUSTICE H.N.DEVANI
Date
: 22/04/2010
COMMON
CAV JUDGMENT
(Per : HONOURABLE MS. JUSTICE
H.N.DEVANI)
1. These
petitions under Article 226 of the Constitution of India challenge
Government Resolution dated 11th
December, 2008 issued by the Government of Gujarat, Urban Development
and Urban Housing Department and demand notices issued pursuant
thereto providing for levy and recovery of Annual Permission Fees and
Installation Charges on mobile telecommunication towers in the areas
covered under Municipal Corporations/Municipalities in the State of
Gujarat. Since common facts and questions of law are involved in all
these petitions the same were heard together and are being disposed
of by this common judgment. For the sake of convenience, the facts
are taken from Special Civil Application No.1898 of 2009.
2. The
petitioner is a public limited company incorporated under the
Companies Act, 1956 and holds a licence to operate cellular telecom
services under the provisions of the Telegraph Act, 1885. For the
purpose of providing mobile/telecommunication service to its
customers/subscribers, the petitioner company is required to have
Base Trans-receiver Stations installed, which are popularly known as
mobile towers. For setting up such mobile towers, the company enters
into agreements with private property owners and thereafter, applies
for permission from the concerned local authority to place towers in
the said properties. Mobile towers are placed on structures, either
on the open ground or on the terrace of the buildings belonging to
private persons. The petitioner company has installed or is in the
process of installing such equipment in various places in the State
of Gujarat.
3. The
Director of Municipalities issued circular dated 12th
May, 2006, under the heading Instructions for levying fees for
installation of mobile telecommunications towers and N.O.C. Permit.
The said circular provided for levy of property tax and permission
fee. Based upon the said circular, different municipalities started
charging different permission fees and annual fees.
4. Since
there was no uniform policy prevailing for grant of permission for
installment of the mobile towers more particularly in the matter of
charging of fees for installment, the Idea Cellular Limited, a
cellular company challenged the same by way of a writ petition before
this Court being Special Civil Application No.13653 of 2006. Vide
judgment and order dated 16.11.2006, the said writ petition came to
be disposed of interalia with the following directions:-
(2) It
is further directed that the State Government
through Secretary, Urban Development
Department shall examine the matter for providing of uniform policy
in the matter of installation charges and annual fees for cellular
tower of the Mobile services provider Company, keeping in view the
various factors like population of the local authority etc. and such
decision shall be taken as early as possible preferably within period
of 3 months from the receipt of the order of this Court.
It
appears that in the said petition, the legality and validity of such
fees was not an issue and as such, had not been examined by the
Court.
5. The
General Body of the Junagadh Municipal Corporation passed a
resolution dated 30.8.2007 interalia making provision for payment of
permission fees/administrative penalty and annual rent in relation to
mobile telecommunication towers. The legality and validity of the
said resolution insofar as the same provided for levy of permission
fee, annual rent and administrative penalty for installment of mobile
towers on private property, came to be challenged by Reliance
Communication Limited by way of a writ petition before this Court
being Special Civil Application No.531 of 2008. Vide judgment and
order dated 09th
September, 2008, passed by a Division Bench of this Court the said
petition came to be allowed and the impugned resolution dated 30th
August, 2007 insofar as the same provided for determination
of permission fees, annual rent and administrative
penalty came to be quashed and set aside. The Court
held that levy of permission fee, annual rent and penalty was without
authority of law as the Bombay Provincial Municipal Corporations,
1949 (BPMC Act) does not authorize levy of such fees.
6. Subsequently,
pursuant to the directions issued by the learned Single Judge vide
order dated 16.11.2006 made in Special Civil Application No. 13653 of
2006, the Government of Gujarat issued a Resolution dated 11.12.2008
making provision for recovery of installation charges, annual
permission fees, administrative charges in lieu of penalty fees etc.
by the municipal corporations/municipalities in relation to mobile
telecommunication towers erected by the cellular companies in the
Municipal Corporation/Municipality areas of the State.
7. Being
aggrieved, the petitioners have moved the present petitions,
challenging the aforesaid Government Resolution and the consequential
action taken pursuant thereto.
8. Heard
the learned advocates appearing on behalf of the petitioners as well
as the respondents in each of the petitions.
9. The
main submission advanced by the learned counsel for the petitioners
is that the impugned Government Resolution is ultra vires Article 265
of the Constitution of India as well as ultra vires the provisions of
the BPMC Act and the Gujarat Municipalities Act, 1963 (Municipalities
Act). Elaborating upon the said submission the learned counsel have
invited the attention of the Court to the provisions of Article 265
as well as clause (28) of Article 366 of the Constitution of India
which defines taxation to submit that tax includes any tax or
impost, whether general or special or local and that in view of the
said provisions it is not permissible for the State to levy or
collect any tax or even a duty, cess or fee except by authority of
law. Attention is also invited to List II of the Seventh Schedule to
the Constitution which enumerates the matters with respect to which
the Legislature of any State has power to make laws and more
particularly to Entry 66 thereof which relates to Fees in respect
of any of the matters in the said List, but not including any fee
taken in any Court to submit that the State Legislature has the
power to levy a fee, which is coextensive with its power to legislate
with respect to substantive matters and that the Legislature while
making a law relating to a subject matter within its competence can
levy a fee with reference to the services that would be rendered by
the State under such law. Referring to Entry 5 of List II of
Schedule 7 which reads thus 5.
Local Government, that is to say, the constitution and powers of
municipal corporations, improvement trusts, district boards, mining
settlement authorities and other local authorities for the purpose of
local self-Government or village administration it
is submitted that it is clear that for levy of permission fee and
annual permission fee on mobile telecommunication towers there should
be a specific provision for such a levy in the BPMC Act and the
Municipalities Act. It is accordingly submitted that it is
permissible for the respondent authorities to levy and collect only
tax and fee as provided under the provisions of the BPMC Act and the
Municipalities Act.
10. Attention
is invited to the provisions of section 127 of
the BPMC Act which provides for Taxes to be imposed under the Act
to submit that the fees sought to be levied by the impugned
Resolution dated 11th
December, 2008 namely, annual permission fees and installment charges
on the mobile telecommunication towers do not fall within any of the
categories enumerated therein.
11. Learned
counsel for the petitioners, have also invited attention to Chapter
XXII of the BPMC Act which provides for Licences and Permits .
Referring to the provisions of Part I to Part VIII thereunder, which
provide for the conditions and mode of grant of licences in respect
of the categories specified thereunder; as well as to the provisions
of section 386 of the BPMC Act which lays down general provisions
regarding grant, suspension or revocation of licences and levy of
fees etc. it is submitted that in view of the provisions of section
386 of the BPMC Act, it is permissible for the Corporation to grant,
suspend or revoke licences or levy fees only in respect of matters
specified in Part I to Part VIII of Chapter XXII. It is submitted
that Part I to Part VIII do not envisage grant of licences or
permission under the Act for the purpose of installation of mobile
towers or poles or other telecommunication equipment. Thus, under the
BPMC Act, there is no provision either for grant of any permission or
licence for installation of mobile telecommunication towers etc. nor
does it contain any provision for levy of any installment fee or
annual permission fee on such mobile towers. It is contended that in
view of the provisions of Article 265 of the Constitution which
stipulates that no tax shall be levied or collected, except by
authority of law, the levy and collection of annual permission fees
and installment charges on mobile telecommunication
towers under the impugned GR dated 11th
December, 2008 without there being any corresponding authority to
levy such fees under the BPMC Act, is ultra vires the Constitution as
well as the BPMC Act. It is submitted that without there being any
provision in the relevant statute providing for levy of any such fee
or impost, it is not permissible under law for the executive to levy
any such fee or impost merely on the basis of executive instructions.
12. The
learned counsel for the petitioners have also invited attention to
the General Development Control Regulations (GDCR) framed by the
Government of Gujarat under the Gujarat Town Planning and Urban
Development Act, 1976 (the Town Planning Act) and more particularly
to Chapter 21 thereof which provides for Control of signs
(hoardings) and outdoor display structures and paging tower and
telephone tower and outdoor display structures . Referring to
Regulation 21.11 thereof which provides for Telecommunication
infrastructure (paging, cellular mobiles, V Sat, MTNL, etc.) it
is submitted that the said Regulation does not provide for levy of
any permission fee or recurring permission fee nor does the same
provide for levy of any kind of fees in respect of telecommunication
infrastructure.
13. Next
it is submitted that similar is the case under the Gujarat
Municipalities Act, 1963 inasmuch as the said Act also does not make
any provision for the levy and collection of annual permission fees
and installment charges on mobile telecommunication towers. Attention
is invited to Chapter VIII of the Municipalities Act which provides
for Municipal Taxation . Referring to the provisions of section
99 which falls under the sub-heading Imposition of taxes under
the said Chapter and provides for Taxes that may be imposed it
is pointed out annual permission fees and installation charges on
mobile telecommunication towers do not find place among the
categories specified thereunder. Referring to section 118 under
sub-heading (3) Power to charge fees under the said Chapter, it
is submitted that the said provision provides for charging fees when
any licence is granted under the Act or any permission is given
thereunder in relation to the categories specified thereunder. It is
pointed out that under the Act there is no provision for grant of
licence in respect of Mobile telecommunication towers nor does the
present case fall within any of the categories in relation to which
permission can be granted by the municipality, in the circumstances,
the levy of annual permission fees and installation charges, not
being backed by any statutory provision under the Municipalities Act
is without authority of law and mere executive instructions cannot
vest in the concerned local authority the power to levy such fees or
impost without any statutory authority. Thus, even under the Gujarat
Municipalities Act, no annual permission/licence fee can be levied on
the mobile telecommunication towers. It is further submitted that
section 271 of the Act enjoins upon the Municipalities to make rules
prescribing the fees to be charged for the licence/permission granted
under section 118. In the circumstances without making rules
prescribing the rates of fees to be charged, the Municipality cannot
levy such fee.
14. Referring
to the decision of this Court in Reliance
Communication Limited vs. Junagadh Municipal Corporation (supra),
it is submitted that this Court has clearly held
that levy of permission fees, annual rent and penalty is without
authority of law as the BPMC Act does not authorize levy of such fees
despite which the State Government has subsequent thereto, issued the
Government Resolution in question which is contrary to the said
decision.
15. It
is accordingly submitted that the impugned Government Resolution
which purports to levy Annual Permission Fee and Installation charge
on Mobile Telecommunication Towers in the Municipal
Corporation/Municipality areas at the rates specified therein is
without authority of law and is ultra vires the Constitution as well
the provisions of the BPMC Act and the Municipalities Act.
16. Attention
is also invited to the provisions of sections 10 and 12 of the Indian
Telegraph Act, 1885 to submit that the Telegraph Act and in
particular sections 10 and 12 thereof clearly preclude a local
authority from seeking to recover anything apart from expenses
incurred by it from the telegraph authority or a licensee seeking to
place a telegraph line/posts/telephone equipment necessary for the
operation of a telegraph/telephone system. It is submitted that the
said provisions were enacted to prevent local authorities from making
licences granted by the Central Government unworkable or hampering
licensees by seeking to exact fees for permission.
17. On
the other hand, Mr. P.K. Jani learned Government Pleader has
vehemently opposed the petitions. Reliance is placed upon the
provisions of Article 162 of the Constitution to submit that where
the Legislature is competent to legislate, the State would be
competent to make a resolution in that regard in exercise of its
executive power. It is submitted that the challenge to the impugned
resolution is barred by acquiescence inasmuch as it was at the
instance of some of the petitioners that the Court had directed the
Government to frame a policy for maintaining uniformity in the rates
imposed by various Municipal Corporations and municipalities in the
State; and that it is pursuant to the directions issued by this Court
that the impugned resolution has been framed. It is submitted that
prior to issuing the said Government Resolution several meetings were
held and the representatives of the petitioners had remained present
before the committee in five meetings. It is contended that in the
circumstances, it is now not open to the petitioners to challenge the
said Government Resolution on the ground of competence of the State
to levy such fees.
18. It
is urged that despite the fact that it was well within the knowledge
of the petitioners that this Court had struck down the levy of annual
rent and permission fees vide judgment and order dated 9/9/2008, the
same had not been brought to the notice of the State Government and
that despite the decision of this Court the petitioners and other
companies have agreed to pay annual fees. In the circumstances, the
petitioners are now estopped from contending that the State
Government has no authority to provide for levy and recovery of such
fees and charges.
19. Mr.
R.M. Chhaya appearing on behalf of the Rajkot Municipal Corporation
has drawn the attention of the Court to the impugned Government
Resolution. It is submitted that the Government Resolution can be
divided into different heads. It is submitted that insofar as
installation charges for mobile telecommunication towers is
concerned, for erection of tower on building, permission is required
to be obtained from the Municipal Corporation under the provisions of
the BPMC Act. Reference is made to the provisions of sub-section (5)
of section 2 of the BPMC Act which defines building to submit
that mobile telecommunication towers would fall within the ambit of
the said provision. Attention is invited to clauses (viii) and (xvii)
of section 2 of the Town Planning Act which define development
and operational construction respectively. It is further
submitted that in view of the provisions of section 26 and 29 of the
Town Planning Act, it is incumbent to obtain permission for
installation of mobile telecommunication towers. It is submitted that
when an application is made for permission to put up a mobile
telecommunication tower, the authority is well within its right to
levy scrutiny fees etc. under the provisions of the Town Planning
Act. Hence insofar as installation charges are concerned, the
decision of the Division Bench in the case of Reliance Communication
Ltd. (supra) would not be applicable. It is also submitted that under
the General Development Control Regulations specific provision has
been made for deposit and fees in relation to telecommunication
infrastructure (Paging, Cellular Mobiles, V Sat, MTNL etc.)
under Regulation 21.11 thereof. It is submitted that in clause (2) of
the said Regulation inadvertently the words maintenance of the
hoarding appear to have crept in. However, since the said clause
appears under Regulation 21.11 it is apparent that the intention of
the Rule making body is to provide for deposit and fee in relation to
telecommunication infrastructure. It is submitted that in the
circumstances, the Municipal Corporations also being urban
development authorities under the TP Act, the Corporations are
empowered to levy and collect fees in respect of telecommunication
towers.
20. In
rejoinder, as regards the contention that the impugned Government
Resolution had been issued in exercise of powers under Article 162 of
the Constitution, the learned counsel for the petitioners have placed
reliance upon a decision of the Apex Court in Commissioner
of Income Tax, Udaipur, Rajasthan v. McDowell and Company Limited,
(2009) 10 SCC 755 for the proposition that to support a tax
legislative action is essential, it cannot be levied and collected in
absence of any legislative sanction by exercise of executive power of
the State under Article 73 by the Union or Article 162 by the State.
Attention is invited to the provisions of Article 243X of the
Constitution which provides for the power to impose tax by, and the
Funds, of the Municipalities. It is submitted that unless the
Legislature of a State in exercise of powers under Article 243X of
the Constitution authorizes Municipalities in the State to levy,
collect and appropriate taxes, duties, tolls and fees, in the light
of the provisions of Article 265, which expressly prohibit the levy
and collection of tax except by authority of law, it is not
permissible for any municipality to impose any tax or fee. It is
submitted that the expression law is defined under Article
13(3)(a) to include any Ordinance, order, bye-law, rule, regulation,
notification, custom or usage having in the territory of India the
force of law. It is submitted that the opening words of Article 162
are subject to the provisions of this Constitution , hence
exercise of powers under the said provision is subject to the other
provisions,
including Article 265 and 243X of the Constitution. Hence, any levy
has to be under legislative power and in absence of the same the levy
of Annual Permission fee and installation charges in exercise of
powers under Article 162 is bad in law and deserves to be struck
down. Insofar as the contentions regarding acquiescence and estoppel
are concerned, it is submitted that it is well settled that there can
be no estoppel against statute. It is submitted that there was no
acquiescence on the part of the petitioners. However, assuming
without admitting that there was acquiescence on the part of the
petitioners that by itself would not render an otherwise
unconstitutional levy, valid.
21. A
perusal of the impugned Government Resolution shows that the same has
been issued in the matter of determining installation charge and
annual fee etc. within the limits of Municipal
Corporations/Municipalities. Under the said resolution it has been
decided to fix the rates of installation charge as well as annual
permission fee in respect of mobile telecommunication towers erected
by Cellular Companies in the Municipal Corporation/Municipal areas of
the State as provided there under. The resolution then provides for
(i) initial installation charge at the rate of Rs.25,000/- per tower;
(ii) annual permission fee according to the height of a tower at the
rate of Rs.1000/- per metre; (iii) fees for amended permission at the
rate of 10% of the prevailing rate; (iv) where towers have been
erected on buildings constructed without building use permission or
where towers have been erected without permit, a fee at the rate of
the prevailing annual permission fee, additionally Rs.50,000/-
administrative charges towards penalty fee; (v) increase in rates as
per (i) and (ii) above-annual fee to be computed by increasing the
annual fee by 10% every two years; (vi) in respect of recovery of
property tax on telecommunication towers it is provided that as
annual fees are being recovered no property tax shall be recovered in
respect of towers.
22. The
aforesaid Government Resolution is challenged to the extent it seeks
to levy and recover Annual Permission fees and Installation Charges
on Mobile Telecommunication Towers in the areas falling under
Municipal Corporation/Municipalities in the State.
23. In
the light of the submissions advanced on behalf of the respondent
State, it is apparent that the impugned Government Resolution has
been issued in exercise of powers under Article 162 of the
Constitution of India. Article 162 reads thus:
162.
Extent of executive power of State. Subject
to the provisions of this Constitution, the executive power of a
State shall extend to the matters with respect to which the
Legislature of the State has power to make laws:
Provided
that in any matter with respect to which the Legislature of a State
and Parliament have power to make laws, the executive power of the
State shall be subject to, and limited by, the executive power
expressly conferred by this Constitution or by any law made by
Parliament
upon the Union or authorities thereof.
Thus,
under Article 162 the executive power of the State extends to the
matter which the Legislature of the State has power to make laws.
However, as the opening portion of the said provision suggests, the
power conferred under Article 162 is subject to the provisions of
the Constitution. Thus, in case any provision of the Constitution
provides otherwise, the executive power of the State would
stand circumscribed to that extent.
24. In
this regard it may be germane to refer to the provisions of Articles
265 and 243-X of the Constitution which read thus:
265.
Taxes not to be imposed save by authority of law. No
tax shall be levied or collected except by authority of law.
243-X.
Power to impose taxes by, and Funds of, the Municipalities. The
Legislature of a State may, by law,
(a) authorise
a Municipality to levy, collect and appropriate such taxes, duties,
tolls and fees in accordance with such procedure and subject to such
limits;
(b) assign
to a Municipality such taxes, duties, tolls and fees levied and
collected by the State Government for such purposes and subject to
such conditions
and limits;
(c) provide
for making such grants-in-aid to the Municipalities
from the Consolidated Fund of the State;
and
(d)
provide for constitution of such Funds for crediting all
moneys received, respectively, by or on behalf of the
Municipalities and also for the withdrawal of such
moneys therefrom, as may be specified in the law.
25. On
a plain reading of Article 265 of the Constitution, it is apparent
that under the said Article there is an express bar against levy or
recovery of tax except by authority of law. The expression law
has been defined under Article 13(3)(a) to include any Ordinance,
order, bye-law, rule, regulation, notification, custom or usage
having in the territory of India the force of law. The question that
therefore, arises is whether the impugned Government Resolution falls
within any of the categories enumerated under Article 13(3)(a) or
would otherwise fall within the inclusive definition. The impugned
resolution evidently is neither an Ordinance, bye-law, rule,
regulation, notification, custom nor usage having the force of law in
the territory of India. At best it may fall within the definition of
order in the ordinary sense. However, the expression order as
employed in Article 13(3)(a) envisages orders made in exercise of
statutory powers conferred by statutory provisions but not
administrative orders having no statutory sanction. In the
circumstances, it cannot be stated that the impugned resolution is
issued under authority of law as envisaged under Article 265.
26. To
put it differently insofar as legislative competence is concerned,
there is no dispute that the State Legislature is competent to enact
a legislation providing for the imposts in question. In view of the
provisions of Article 162 of the Constitution, the executive power of
the State Government is co-extensive with the legislative power of
the State legislature. If the State legislature has power to enact
laws on a matter enumerated in the State List or in the Concurrent
List the State has executive power to deal with those matters subject
to other provisions of the Constitution. If a subject matter falls
within the legislative competence of State legislature, the exercise
of executive power by the State Government is not confined, as even
in the absence of a law being made, the State Government is competent
to deal with the subject matter in exercise of its executive power.
However, Article 162, itself carves out an exception, viz., the
executive power is subject to the other provisions of the
Constitution. Article 265 imposes a limitation on the taxing power
of the State insofar as it provides that the State shall not levy or
collect a tax, except by authority of law, that is to say, a tax
cannot be levied or collected by a mere executive fiat. Thus, the
State under the garb of exercise of powers under Article 162, cannot
levy any tax, fees, cess etc. unless the same is backed by a
statutory enactment.
27. Apart
from Article 265 which prohibits levy or recovery of tax except by
authority of law, Article 243-X specifically provides that the
Legislature
of a State may, by law authorise a Municipality to levy, collect and
appropriate such taxes, duties, tolls and fees in accordance with
such procedure and subject to such limits as may be specified by law.
Thus on a conjoint reading of Articles 265 and 243-X, there is a
prohibition
against levy and recovery of tax by a Municipality unless the
Legislature of the State in exercise of powers under Article 243-X
authorises the Municipality to levy and collect such taxes, fees etc.
In the present case, a bare reading of the impugned Government
Resolution indicates that the same has not been issued in exercise of
any statutory power. However, even if the statutory provision under
which the power is derived is not mentioned, so long as there is some
statutory provision under which such power is derived, the Government
Resolution would not stand vitiated. In the circumstances it would
next be required to be examined as to whether there is any statutory
provision which vests in the State or the Municipal Corporations or
Municipalities, the power to levy and collect annual permission fees
and installation charges for erection of mobile telecommunication
towers put up by cellular companies.
28. In
this regard it may be pertinent to refer to certain provisions of the
BPMC Act and the Municipalities Act. Chapter XI of the BPMC Act
provides for Municipal Taxation and section 127 thereof lays
down the categories of taxes which may be imposed by the Corporation.
Sub-section (1) of section 127 provides for imposition of (a)
property taxes and (b) a tax on vehicles, boats and animals for the
purposes of the Act. Sub-section (2) thereof lays down that in
addition to the taxes specified in sub-section (1) the Corporation
may for the purposes of the Act and subject to the provisions thereof
impose the following taxes, namely (a) octroi; (c) a tax on dogs; (d)
a theatre tax; (e) a toll on animals and vehicles entering the City;
(f) any other tax (not being a tax on professions, trades, calling
and employment) or a tax on payments for admission to any
entertainment which the State Legislature has power under the
Constitution to impose in the State. Sub-section (3) of section 127
lays down that the municipal taxes shall be assessed and levied in
accordance with the provisions of the Act and rules. On a plain
reading of the aforesaid provision it is apparent that annual
permission fee and installation charges are not among the categories
specifically named thereunder. However, under clause (f) of
sub-section (2) other levies in the nature of tax could be levied.
Therefore, it has to be ascertained as to whether the imposts in
question fall within the category of other taxes under section
127(2). In this regard it may be pertinent to note that under the Act
specific provision is made for assessment and levy of the specified
categories enumerated thereunder. Insofar as other taxes are
concerned, section 149 of the BPMC Act provides for the procedure to
be followed in levying other taxes. The section lays down that in the
event of the Corporation deciding to levy any of the taxes specified
in sub-section (2) of section 127, it shall make detailed provision
in so far as such provision is not made by the Act, in the form of
rules, modifying, amplifying or adding to the rules at the time in
force in the matters enumerated thereunder which interalia are the
nature of tax, the rates thereof, the class or classes of persons,
articles or properties liable thereto and exemptions therefrom, if
any to be granted; the system of assessment and method of recovery
and the powers exercisable by the Commissioner or other officers in
the collection of the tax; the information required to be given of
liability to tax; the penalties to which persons evading liability or
furnishing incorrect and misleading information or failing to furnish
information may be subjected; such other matters, not inconsistent
with the provisions of the Act as may be deemed expedient by the
Corporation. The proviso to sub-section (1) of section 149 lays down
that no rules shall be made by the Corporation in respect of any tax
under clause (f) of sub-section (2) of section 127 unless the State
Government shall have first given provisional approval for selection
of tax by the Corporation. The subsequent provisions lay down the
procedure for sanction of the rules submitted by the Corporation by
the State Government. Thus, for the purpose of levying tax under the
heading other taxes an elaborate procedure is required to be
followed and specific provisions have to be made. In the present
case, it is an admitted position that in respect of the imposts in
question no such provisions for levy and collection have been made in
the rules. Thus, the said imposts clearly do not fall within the
category of other taxes so as to attract the provisions of section
127 of the BPMC Act.
29. Since
the levy in question is termed annual permission fee and installation
charge, it may be pertinent to refer to the provisions of Chapter
XXII of the BPMC Act which provides for Licences and Permits .
The said Chapter is subdivided into nine parts as under:
Licensing
of Surveyors, Architects or Engineers, Structural Designers, Clerks
of Works and Plumbers;
Trade
licences and other licences for keeping animals and certain
articles;
Licences
for sale in municipal markets;
Licences
for private markets;
Licences
for sale of Articles of Food outside of Markets;
Licensing
of Butchers, etc.;
Licensing
for diary products;
Licences
for hawking, etc.; and
General
Provisions regarding licences and Permits.
30. A
bare perusal of the categories enumerated under Chapter XXII makes it
amply clear that none of the categories provide for licences or
permits in relation to annual permission fee or installation charges.
No other provision under the BPMC Act is pointed out by the learned
advocates for the respondents which would enable the respondents to
levy and collect annual permission fee and installation charges for
mobile telecommunication towers put up by Cellular companies. Thus,
insofar as the BPMC Act is concerned, the same does not contain any
provision which provides for levy and collection of annual permission
fee and installation charge in respect of mobile telecommunication
towers.
31. A
faint attempt had been made to suggest that the provisions of section
253 and 254 of the BPMC Act which provides for Notice to be given
to Commissioner of intention to erect building and Notice to be
given to Commissioner of intention to make additions, etc. to
building both of which fall under Chapter XV under the heading
Building Regulations , would be applicable to erection of mobile
telecommunication towers. However, the said contention is irrelevant
inasmuch as in the present case we are concerned with the imposition
of annual permission fee and installation charges and not with grant
or breach of building permission.
32. It
has been contended on behalf of the respondents that in view of the
fact that under the provisions of section 26 and 29 of the Town
Planning Act, it is incumbent to obtain permission for installation
of mobile telecommunication towers and that while processing an
application for permission to put up a mobile telecommunication
tower, the authority is well within its right to levy scrutiny fees
etc. under the provisions of the Town Planning Act. Therefore,
insofar as installation charges are concerned, the decision of the
Division Bench in the case of Reliance Communication Limited (supra)
would not be applicable. In this regard it may be pertinent to refer
to Chapter 3 of the GDCR which provides for Procedure for Securing
Development . Regulation 3.1 thereof provides for Application
for development permission and Regulation 3.2 makes provision for
scrutiny fee . Regulations 3.2.1 to 3.2.7 lay down different
types of development and the corresponding rates of scrutiny fee.
However, none of the types of development referred to in the said
regulations are in respect of mobile telecommunication towers. Hence,
there is no provision for scrutiny fee in relation to erection of
mobile telecommunication towers. In the circumstances, the said
provisions cannot be stated to be the source of authority to levy
installation charge.
33. A
perusal of the GDCR shows that specific provision is made in respect
of Telecommunication infrastructure which includes cellular mobiles,
under Chapter 21 thereof, and more particularly under Regulation
21.11. However, while sub-regulation (1) provides for regulation of
the location, type of structure, requirement and projection in
respect of such structures, sub-regulation (2) which provides for
Deposit and Fees lays down that the fees for erection and
maintenance of the
hoarding
shall be charged as decided by Competent Authority from time to time.
Thus, insofar as the provision for deposit
and fees is concerned, the same is in respect of hoardings and not
telecommunication infrastructure. In this regard it has been
submitted by the learned advocates for the respondents, there may be
an error on the part of the rule making authority. In reply to the
said contention, the learned advocates for the petitioners have
placed reliance upon the decision of the Supreme Court in Janapada
Sabha Chhindwara v. The Central Provinces Syndicate Ltd. and Another,
1970 (1) SCC 509
and more particularly paragraph 7 thereof, wherein it has been held
thus:
xxx.
If the
Act does not by the plain language used therein carry out the
object, the Court will not be justified in supplying deficiencies
in the Act. As ob served by Rowlatt, J., in Cape
Brandy Syndicate
v. Commissioners
of Inland Revenue:
In
a taxing Act one has to look merely at what is clearly said. There
is no room for any intendment. There is no equity about a tax.
There is no pre- sumption as to a tax. Nothing is to be read
in, nothing is to be implied. One can only look fairly at the
language used.
It
may also be apt to refer to the following observations made by the
Supreme Court in Nalinakhya
Bysack v. Shyam Sunder,
AIR 1953 SC 148:
It
must always be borne in mind, as said by Lord Halsbury in
Commissioner
for Special Purposes of Income Tax v.
Pemsel,
that it is not competent to any court to proceed upon the assumption
that the legislature has made a mistake. The Court must proceed
on the footing that the legislature intended what it has said. Even
if there is some defect in the phraseology used by the legislature
the court cannot, as pointed out in Crawford
v. Spooner,
aid the legislature s defective phrasing of an
Act or add and amend or, by construction, make up deficiencies which
are left in the Act. Even where there is a casus omissus,
it is, as said by Lord Russell of Killowen in Hansraj
Gupta v.
Official
Liquidator of Dehra Dun-Mussoorie Electric Tramway Co., Ltd.,
for others than the courts to remedy the defect.
Thus,
if at all there is any mistake in the wording of Regulation 21.11
(2), it is for the concerned rule making body to correct the same.
Insofar as the Court is concerned, the Court has to go by the literal
meaning of the provision. On a plain reading of sub-regulation (2) of
Regulation 21.11, it is apparent that the same does not in any manner
provide for deposit or fees in relation to telecommunication
infrastructure. Hence, the power to levy annual permission fees and
installation charges does not originate from the said provision.
34. In
the light of the aforesaid discussion, it is apparent that insofar as
Municipal Corporations are concerned, the respondents have not been
in a position to point out any statutory force behind the levy of
annual permission fee and/or installation charges. The Apex Court in
Commissioner
of Income Tax, Udaipur v. McDowell and Company Limited
(supra) has held thus :
Tax ,
duty , cess or fee constituting a class denotes to
various kinds of imposts by State in its sovereign power of taxation
to raise revenue for the State. Within the expression of each specie
each expression denotes different kind of impost depending on the
purpose for which they are levied. This power
can be exercised in any of its manifestation only under any
law authorising levy and collection of tax as envisaged under Article
265 which uses only the expression that no tax shall be levied
and collected except authorised by law. It in its elementary meaning
conveys that to support a tax legislative action is essential, it
cannot be levied and collected in the absence of any legislative
sanction by exercise of executive power of State under Article 73 by
the Union or Article 162 by the State.
In
the light of the law laid down by the Supreme Court in the decision
cited hereinabove, it is apparent that in absence of legislative
sanction, the State Government in exercise of its executive power
under Article 162 cannot levy and collect annual permission fee and
installation charges in relation to mobile telecommunication towers
put up by Cellular companies.
35. Insofar
as Municipalities are concerned, it has been contended on behalf of
the respondent municipalities that the power to levy annual
permission fee and installation charges flows from section 99 and/or
section 118 of the Municipalities Act.
Section 99 of the Municipalities Act falls under Chapter VIII of the
Act which provides for Municipal Taxation under sub-heading (1)
which provides for imposition of taxes. Section 99 makes provision
for imposition of taxes by a municipality and enumerates the specific
categories. A perusal of section 99 shows that annual fee and/or
installation charges for putting up mobile telecommunication towers
by cellular companies does not find place among the categories
enumerated thereunder. Clause (xv) of section 99 provides for any
other tax. However, as in the case of the BPMC Act, before levying
any other tax, the municipality is required to follow the procedure
laid down under section 101 of the Municipalities Act which provides
for Procedure preliminary to imposing tax . In the present case
it is an admitted position that no procedure under section 101 has
been followed for the purpose of levying annual permission fee and/or
installation charges, hence the power to levy such imposts cannot be
traced to section 99 of the Municipalities Act. The other provision
on which reliance has been placed to justify the impost is section
118 of the Municipalities Act which provides for charging of fees for
certain licences. The said provision provides for charging fees when
any licence is granted under the Act or when permission is given
thereunder for making any temporary erection or putting up any
projection, or for the temporary occupation of any public street or
other land vested in the municipality. A perusal of the provisions of
the Municipalities Act shows that there are only two sections which
make provision for issuing licences, viz. section 207 which provides
for Licensing markets and slaughter houses and section 213
which provides for Licensing of dairies . Thus, insofar as
grant of licence is concerned the provisions of section 118 would
clearly not be attracted.
Insofar as permission under section 118 is concerned, the same is
required to be obtained in respect of the categories mentioned
thereunder. Dealing with each category individually, insofar as
making temporary erection or putting up any projection is concerned,
it is nobody s case that the mobile telecommunication towers are
temporary erections. As regards putting up any projection is
concerned, section 176 of the Municipalities Act provides for
permission necessary for certain projections. Under the said
provision owners or occupiers of buildings in public streets may be
given permission to put up open verandahs, balconies or rooms to
project from any upper storey of such buildings, to an extent not
exceeding 1.24 meters beyond the line of the plinth or basement wall
of the building. Thus, written permission qua projections envisages
projections beyond the line of the plinth or basement wall of the
building, which is not so in the present case. The last category is
for the temporary occupation of any public street or other land
vested in the municipality. The present case evidently does not fall
in the said category since mobile telecommunication towers are not
put up by way of temporary occupation on any public street or land
vested in the municipality. In the circumstances, the power to levy
annual permission fee and/or installation charges also cannot be
traced to the provisions of section 118 of the Municipalities Act. No
other provision is pointed out to the Court. Thus, it is apparent
that there is no provision under the Gujarat Municipalities Act,
which authorises the authorities thereunder to levy and collect
annual permission fee and installation charges in respect of mobile
telecommunication towers.
36. It
has been contended on behalf of the respondents that
the impugned Government Resolution has been issued pursuant to
directions of the High Court in Special Civil Application No.13653 of
2006 whereby the State
has come out with a uniform policy providing for levy and recovery of
installation charges, annual permission fees, administrative charges
in lieu of penalty fees etc. However as discussed in the preceding
paragraphs in view of the provisions of section 265 of the
Constitution, no tax can be levied or collected unless the same is
backed by some statutory force. Merely because the Government
Resolution has been issued pursuant to directions of this Court would
not vest power in the Municipal Corporations and Municipalities to
impose and recover tax from the petitioners. The directions issued by
the Court proceed on the footing that the uniform policy to be
formulated shall be as permissible in law. The Executive cannot use
the directions of the Court for doing something which the law does
not permit. The Court having not issued any such direction, namely
to act contrary to law, the Executive cannot be permitted to contend
so, and cannot be permitted to usurp powers vested specifically in
the legislature by the Constitution of India. Besides, it may be
noticed that there was a supervening circumstance, between the
issuance of the directions by this Court and the issuance of the
impugned Government Resolution in the form of a decision of this
Court rendered on 9.09.2008 in Special Civil Application No.531 of
2008 laying down that in absence of any statutory provision
permitting the respondents to impose permission fees in respect of
Mobile Towers, the levy of permission fees is without authority of
law and violative of Article 265 of the Constitution. The Court had
also held that administrative penalty could not have been imposed
without first enacting any provision as to under what circumstances
such penalty could be imposed. However, despite the aforesaid binding
precedent of this Court, the respondent State authorities have issued
the present Government Resolution which is directly in conflict with
the law laid down in the said decision and have provided for levy of
annual permission fee, installation charges and administrative charge
towards penalty.
37. The
provision for recovering administrative charge in lieu of penalty is
also not sustainable in view of the law laid down in the aforesaid
decision, inasmuch as unless there is a provision for imposition of
penalty, the question of recovering such penalty would not arise.
When there is no question of recovery of penalty the question of
administrative charges in lieu of penalty also would not arise.
38. Insofar
as the contention regarding estoppel and acquiescence is concerned,
it is settled legal position that there cannot be estoppel against
statute. Besides in view of the law laid down by this Court there
cannot be any acquiescence on the part of the petitioners. Moreover,
if the impugned Government Resolution is not in accordance with law,
it is bad in law. Powers cannot be derived by consent and an impost
cannot be levied by concession.
39. Before
parting it may be noticed that the BPMC Act has been enacted in the
year 1949 whereas the Gujarat Municipalities Act, 1963 has been
enacted in 1963. At the relevant time there were no mobile phones,
hence the question of making any provision for mobile
telecommunication towers did not arise. With the advent of new
technology which was not envisaged when the legislation was framed,
necessary amendments are required to be made in the Acts making
provision for bringing the technological advances within the purview
of the Acts. However, till such exercise is undertaken by the
Legislature, it is not permissible for the respondent authorities to
levy and collect taxes or fees in respect of mobile telecommunication
towers which do not find place in the corresponding statutes.
40. In
view of the above discussion, it is hereby declared that the impugned
Government Resolution dated 11th December, 2008 issued by
the Government of Gujarat Urban Development and Urban Housing
Department is ultra vires the provisions of Article 265 of the
Constitution as well as ultra vires the provisions of the Bombay
Provincial Municipal Corporations Act, 1949 as well as the Gujarat
Municipalities Act, 1963. In
the aforesaid premises, the impugned Government Resolution being
contrary to the decision of this Court in Reliance Communications
Limited (supra) as well as having been issued without any authority
of law cannot be sustained and deserves to be quashed and set aside.
41. In
the result the petitions succeed and are accordingly allowed. The
impugned Government Resolution dated 11th December, 2008 issued by
the Government of Gujarat, Urban Development and Urban Housing
Department as well as the demand notices issued pursuant thereto are
hereby quashed and set aside. Rule is made absolute accordingly with
no order as to costs.
42. In
Special Civil Application No.2024 of 2009, the petitioner
has challenged demand notices pursuant to the impugned Government
Resolution dated 11th
December, 2008. The petitioner has already challenged Government
Resolution dated 11th
December, 2008. In view of the fact that the impugned Government
Resolution which forms the basis for the demand notices in question
has been quashed and set aside, the impugned demand notices cannot be
sustained.
43. The
petition is accordingly allowed. The impugned demand notices dated
01st
January, 2009 and 02nd
February, 2009 are hereby quashed and set aside. Rule is made
absolute.
44. Registry
is directed to place a copy of this judgment in each petition.
(
D.A. Mehta, J. )
(
Harsha Devani, J. )
hki
Top