SCA/531/2008 13/ 13 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 531 of 2008 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 ? ========================================== RELIANCE COMMUNICATIONS LIMITED - Petitioner(s) Versus JUNAGADH MUNICIPAL CORPORATION & 1 - Respondent(s) ========================================= Appearance : MR SN SOPARKAR, SR. ADVOCATE with MR.AMAR N BHATT for Petitioner MR HS MUNSHAW for Respondents ========================================== CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MS.JUSTICE H.N.DEVANI Date : 09/09/2008 JUDGMENT
(Per
: HONOURABLE MS.JUSTICE H.N.DEVANI)
By
this petition, the petitioner seeks the following substantive
reliefs :
ýS[7] The
petitioner therefore prays that this Honourable Court may be pleased
to :
[A] Issue
an appropriate writ to quash and set aside the attachment warrant
dated 10/1/2008 at Annexure ýSAýý hereto issued by the respondent
No.1 herein and quash and set aside the letters of the respondents
dated 22/10/2007 (Copy at Annexure ýSAýý hereto), 21/11/2007 (Copy
at Annexure ýSEýý hereto) and 10/12/2007 (Copy at Annexure ýSFýý
hereto).
[AA] Issue
an appropriate writ to command the respondents to place on record
Resolution No.63 dated 30/8/2007 and Administrative Order No.248
dated 11/9/2007 and thereafter quash and set aside the same in so far
as they seek to charge permission fees, administrative penalty and
annual rent from the cellular/mobile service provider company and
declare that the said Resolution and the Administrative Order are
illegal and void.
[AAA] Issue
an appropriate writ to quash and set aside the demand raised by the
respondents for annual rent, permission fees and administrative
penalty to the tune of Rs.13,99,000/- from the petitioner as per the
order dated 18/1/08, and direct the respondents to refund an amount
of Rs.1,40,000/- collected from the petitioner on 24/12/2007.ýý
The
petitioner, a Company, is engaged in the business of
telecommunications. For the purpose of providing mobile
/telecommunication service to its customers/subscribers, the
petitioner is required to have certain Base Trans Receiver Station
Installations which are popularly known as Mobile Towers. For
setting up such Mobile Towers, the petitioner enters into agreements
with private property owners and thereafter, applies for permission
from the local authorities to place tower/s in the said property.
The Mobile Towers are placed on structures, either on the ground
floor or on the terraces of the buildings. The Poles are sometimes
placed on high-rise buildings. In Junagadh city, the petitioner has
six ground base/terrace base towers and two terrace base poles
through which the petitioner provides telecommunication service to
its subscribers in the city of Junagadh and its nearby areas. Except
for one tower base pole, the respondent No.1 has granted permission
for placing the towers on private properties and one ground
base/terrace base tower, for which the procedure for permission is
going on, and the application made by the petitioner for such
permission is pending.
By
communication dated 22.10.2007, the respondent No.1 informed the
petitioner that the General Body of the respondent No.1 had passed a
resolution being Resolution No.63 on 30th August, 2007
which was followed by an administrative order dated 11th
September, 2007 whereby the petitioner was required to pay a total
amount of Rs.8,32,000/- towards permission fees/administrative
penalty and annual rent for its ground base/terrace base towers and
Rs.5,67,000/- for its terrace base poles and called upon the
petitioner to make payment within seven days thereof. The demand for
annual rent included the annual rent for the years 2005-06 and
2006-07 also. The petitioner sent a reply to the aforesaid
communication on 27.10.2007. The respondent No.1 once again
reiterated the aforesaid demand vide letter dated 21.12.2007. Vide
communication dated 10.12.2007, the petitioner was informed that the
respondent No.1 was authorised to take decision regarding penalty
and fees and was, accordingly, called upon to make payment.
Thereafter on 11.1.2008 the respondent No.1 issued an attachment
warrant under Rule 42 of the Bombay Provincial Municipal Corporation
Taxation Rules directing the petitioner to pay the outstanding
amount of Rs.13,99,000/- within seven days of the receipt of the
notice, failing which the movable property of the petitioner would
be attached. Being aggrieved by the aforesaid action of the
respondents, the petitioner has moved the present petition praying
for the reliefs noted hereinabove.
Heard,
S.N. Soparkar learned Senior Counsel with Mr. Amar N. Bhatt learned
Advocate for the petitioner and Mr. H.S. Munshaw learned Advocate
for the respondents.
The
learned Senior Advocate submitted that the respondent No.1 is
empowered to collect tax only as provided under the provisions of
the Bombay Provincial Municipal Corporations Act, 1949 (BPMC Act).
Referring to the provision of Section 127 of the BPMC Act, it was
further pointed out that the tax sought to be levied does not fall
within any of the categories enumerated thereunder. Attention was
also drawn to the provisions of Chapter XXII of the BPMC Act, which
provides for ýSLicences and Permitsýý.
It was pointed out that Chapter XXII consists of nine parts. Part I
to VIII make provision for different categories of licences viz. (I)
Licensing for Surveyors, Architects or Engineers etc., (II) Trade
licences and other licences for keeping animals etc., (III) Licences
for sale in municipal markets, (IV) Licences for private markets,
(V) Licences for sale of Articles of Food outside of Markets, (VI)
Licensing for Butchers etc. (VII) Licences for diary products,
(VIII) Licences for hawking, etc. whereas Part IX contains general
provisions regarding Licences and Permits. Thus Part IX makes
provision regarding grant, suspension or revocation of licences and
levy of fees etc. in respect of the matters specified under Part I
to VIII. Part I to VIII do not envisage obtaining licence under the
Act for the purpose of putting up Mobile Towers or poles. Drawing
attention to the provisions of Article 265 of the Constitution of
India which provides that no tax shall be levied or collected except
by authority of law, it was submitted that in absence of any
statutory provision the levy of permission fees was violative of
Article 265 of the Constitution. In support of his submissions, the
learned Counsel placed reliance upon the decision of the Supreme
Court in the case of Mumbai Agricultural Produce Market
Committee and another v. Hindustan Lever Limited and others,
2008 (5) SCC 575 as well as the decision of the Supreme Court in the
case of Ahmedabad Urban Development Authority v. Sharadkumar
Jayantikumar Pasawala & Ors., 1993 (1) GLR 655 for the
proposition that in absence of express provision a delegated
authority cannot impose tax or fee. Such power of imposition of tax
or fee by delegated authority must be very specific and there is no
scope of implied authority for imposition of such tax or fee.
It
was further submitted that the petitioner was already paying taxes
under the BPMC Act by treating the structure as a building and that
there is no provision under the Act for grant of licence in
connection with putting up Mobile Towers or poles. It was stated
that insofar as municipal taxes are concerned, the same are being
regularly paid. As regards levy of fees, it was submitted that it is
settled legal position that if no service is being rendered, no fee
could be levied. On the principle of quid pro quo fees cannot
be levied as no service is provided by the Corporation. It was
submitted that assuming that the respondents had the authority to
levy fees, the same should be commensurate with the service being
rendered. That fees cannot be levied in such a manner so as to cause
unjust enrichment in favour of the State. It was, accordingly,
submitted that the respondents had no power to levy such fees,
penalty or annual rent. That nothing had been brought on record to
show as to in exercise of which power such fees, penalty and annual
rent were sought to be levied. It was pointed out that the Mobile
Towers/poles were set up on private properties, hence the respondent
No.1 had no right or authority to charge annual rent in respect of
such property. It was contended that retrospective recovery of
permission fees and administrative penalty was not permissible under
law. Drawing attention to the demand notices, it was pointed out
that the annual rent was sought to be recovered with retrospective
effect for several years prior to the passing of the resolution in
question. It was submitted that in any case such levy cannot be
retrospective in effect. It was accordingly urged that the impugned
Resolution being without any authority of law deserves to be quashed
and set aside.
On
the other hand Mr. H.S. Munshaw learned Advocate for the respondents
vehemently opposed the petition. It was submitted that, prior to
determining itý”s policy on the issue of collection of installation
fees and yearly permission fees for such towers, the respondent No.1
had undertaken a study of the existing policies of Rajkot Municipal
Corporation, Ahmedabad Municipal Corporation and Jamnagar Municipal
Corporation and had thereafter formulated its policy for levying
such fees as well as penalty in case of violation of the provisions
of all the Acts and the General Development Controlling Regulation
(GDCR). It was submitted that the respondent No.1 had followed the
provisions of section 386(2) of the BPMC Act for fixation of such
fees and a proposal dated 7.12.2006 had been forwarded to the
Secretary of the Junagadh Municipal Corporation for placing the
matter before the Standing Committee, which was initially turned
down, but later on a Resolution came to be passed on 10.7.2007
approving the said proposal. Subsequently, the General Body of the
respondent No.1, vide the impugned Resolution dated 30.8.2007 gave
its approval to the resolution passed by the Standing Committee. A
perusal of the said Resolution would show that the same was passed
to collect installation charges, yearly permission fees and penalty.
It was submitted that due procedure has been followed as laid down
under the provisions of the BPMC Act. That subsequently on the basis
of the rates determined by the respondent No.1, demand notice was
issued to the petitioner on the issue of payment of fees as well as
penalty, and the petitioner was called upon to supply necessary
details. However, despite issuance of notices, the petitioner failed
to fulfill necessary conditions and requirements, hence the
petitioner was held liable to pay installation fee, yearly
permission fee and penalty as determined by the authority. It was
accordingly submitted that the action taken by the respondents was
just, legal and proper and in consonance with the provisions of the
BPMC Act and as such did not call for any intervention by this
Court.
As
is apparent from the facts noted hereinabove, the challenge in the
petition is to the attachment warrant under Rule 42 of the Rules as
well as notices dated 22.10.2007 and 14.12.2007 as well as the
Resolution dated 30.8.2007 and administrative order dated 11.9.2007
which form the basis of the aforesaid notices and attachment
warrant. Hence, the core issue that arises for consideration is as
to the legality and validity of the resolution dated 30.8.2007.
A
perusal of the resolution dated 30.8.2007 shows that by the said
resolution the General Board of the respondent No.1 has approved of
the resolution dated 10.7.2007 of the Standing Committee for
determination of permission fees, annual rent and penalty. Hence it
would be necessary to refer to the contents of the resolution dated
10.7.2007 passed by the Standing Committee of the respondent No.1.
By the said resolution the Standing Committee has given its approval
to the proposal made by the Commissioner in respect of the necessary
documents for setting up base transmission tower/pole within limits
of the Junagadh Municipal Corporation, permission fees, annual rent
and penalty. Moreover in case of those towers which have been put up
in an illegal manner and in case of those terrace towers in respect
of which permission is sought for in future, in each case permission
shall be granted only upon production of certificate of an architect
registered with the Corporation giving a clear opinion in writing
that technically as well as in relation to FSI, no problem shall be
caused to the structure of the building on account of the mobile
tower.
On
the facts of the present case, we are concerned with the first part
of the resolution, which provides for collection of permission fees,
annual rent and penalty. The case of the respondents is that the
impugned resolution has been passed in exercise of powers under
section 386(2) of the BPMC Act. Section 386 of the BPMC Act as is
relevant for the present purpose reads as under:
ýS386.
(1) Whenever it is provided by or under this Act that a licence or a
written permission may be given for any purpose, such licence or
written permission shall specify the period for which, and the
restrictions and conditions subject to which, the same is granted and
the date by which an application for the renewal of the same shall be
made and shall be given under the signature of the Commissioner or a
municipal officer empowered under section 69 to grant the same.
(2)
Except as may otherwise be provided by or under this Act, for every
such licence or written permission a fee may be charged at such rate
as shall from time to time be fixed by the Commissioner, with the
sanction of the Corporation.ýý
On
a bare reading of the aforesaid provision it is apparent that the
Corporation is empowered to determine the rates of fees for such
licence or written permission only in those cases where the Act
provides that a licence or a written permission may be given for any
purpose. Thus, the purpose for which licence or written permission
may be given is required to be specified under the BPMC Act, and it
is only in case of such licence or written permission that the
Corporation is empowered to determine the rates of fees. A perusal
of the provisions of the BPMC Act shows that provision for ýSLicences
and Permitsýý is made under Chapter XXII and specific categories of
cases are enumerated thereunder in Part I to VIII of the said
Chapter, which have been referred to hereinabove in detail. A
perusal of the said categories shows that the same do not include
licences or permits in respect of Mobile Towers. The learned
Advocate for the respondents is not in a position to point out any
other provision of the Act, which makes provision for licences or
permits in relation to Mobile Towers so as to attract the provisions
of sub-section (2) of section 386 of the BPMC Act. In the
circumstances, 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 as such
is violative of Article 265 of the Constitution and cannot be
sustained. This view gets support from the decision of the Supreme
Court in the case of Ahmedabad Urban Development Authority v.
Sharadkumar Jayantikumar Pasawala & others (supra)
wherein the Court while dealing with the validity of levy of
development fee under the Gujarat Town Planning and Urban
Development Act, 1976, held that in a fiscal matter, in absence of
express provision, a delegated authority is not competent to impose
tax or fee. In the view of the Court, such power of imposition of
tax and/or fee by delegated authority must be very specific and
there is no scope of implied authority for imposition of such tax or
fee. The delegated authority must act strictly within the parameters
of the authority delegated to it under the Act and it will not be
proper to bring the theory of implied intent or the concept of
incidental or ancillary power in the matter of exercise of fiscal
power.
As
regards determination of annual rent, the source of powers according
to the respondents is section 386(2) of the BPMC Act. From the
language employed in the said provision it is clear that the same
empowers the Commissioner to determine the rate of fees for licences
or written permissions. The same nowhere envisages the determination
of annual rent. Besides, undisputedly, the towers/bases/poles are
set up on private properties, hence, the respondent No.1 has no
right or authority to charge annual rent in respect of private
property. In the circumstances, the levy of annual rent is also bad
in law.
Insofar
as administrative penalty is concerned, the learned Advocate for the
respondents is not in a position to point out any provision of law
that permits the respondents to impose such penalty. It is settled
legal position that in absence of any statutory provisions for
imposition of penalty, no penalty can be imposed. In the
circumstances, merely by virtue of a resolution passed by the
respondent No.1, administrative penalty could not have been imposed,
that too without first enacting any provisions as to under what
circumstances such penalty could be imposed. In other words without
specifying the default, which would entail the imposition of penalty
no penalty could have been imposed. Hence, the imposition of
administrative penalty being without any authority of law cannot be
sustained.
For
the foregoing reasons, the impugned resolution insofar as it
provides for determination of permission fees, annual rent and
penalty, deserves to be set aside. Consequently the demand notices
and attachment warrant based upon the said resolution must suffer
from the same fate.
In
the result, the petition succeeds and is accordingly allowed. The
impugned Resolution No.63 dated 30th August, 2007 passed
by the respondent No.1 insofar as it provides for determination of
permission fees, annual rent and administrative penalty as well as
Administrative Order No.248 dated 11.9.2007 are hereby quashed and
set aside. Consequently the impugned demand notices and attachment
warrant are also quashed and set aside. As a necessary corollary,
the petitioner would be entitled to refund of any amount recovered
under the impugned demand notices. Rule is made absolute
accordingly, with no order as to costs.
[D.A.MEHTA,
J.]
[HARSHA
DEVANI, J.]
parmar*