Hutchison Essar South Limited, Bangalore vs Corporation Of The City Of Belgaum, Belgaum

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2010 Supreme(Kar) 1039

High Court of Karnataka
THE HONOURABLE MR. JUSTICE H.N. NAGAMOHAN DAS
Hutchison Essar South Limited, Bangalore
Versus
Corporation Of The City Of Belgaum, Belgaum
Writ Petition No 19530 of 2005 (LB-Tax) connected with Writ Petition Nos. 7162, 7472 and 7473 of 2009, 7163, 7487 to 7492 of 2009, 7164, 7485 of 2009, 7165 and 7474 of 2009, 8124 to 8132 of 2009, 8133, 8134 and 12368 of 2009 (LB-RES).
Decided On : 25-11-2010

Advocates Appeared:
For the Petitioner:Sriyuths Vijaya, Senior Counsel for M/s. Gururaj and Associates and col. Bhupinder Singh, Advocates.
For the Respondent:Hemalekha K.A., Mallikarjunaiah, Government Pleader, Hegde, Neeralgi, Patil, D.S. Hosmath, S. Mahesh, M/s. S. Raju and Associates, D.C. Jagadish, B.K. Manjunath, Ashok N. Nayak and M/s. Nagarajappa and Associates, Advocates,

Headnote:KARNATAKA MUNICIPAL CORPORATION ACT, 1976 - Section 2(1-A): [H.N.Nagamohan Das,J] ’Building’ - Held, Erection of telecommunication towers fall within definition of word ’building’ specified under the Acts. Permission/licence from concerned local body is necessary. On completion of erection of tower, then the concerned local body is entitled to levy tax on it.
       KARNATAKA MUNICIPALITIES ACT, 1964 - Section 2(3): [H.N.Nagamohan Das,J] ’Building’ - Held, Erection of telecommunication towers fall within definition of word ’building’ specified under the Acts. Permission/licence from concerned local body is necessary. On completion of erection of tower, then the concerned local body is entitled to levy tax on it.
       KARNATAKA MUNICIPALITIES ACT, 1964 - Section 42, Proviso: [Manjula Chellur & B.Sreenivase Gowda, JJ] Failure to comply with proviso to Section 42(9) of the Act - Held, Compliance of provision of Section 42(9), is subject to compliance of Section 47(2) & (3), which is absent in the instant case, in the light of the decision, in the case of Shivamma v Deputy Commissioner, Tumkur, 2003 (2) Kar.LJ. 71.
       KARNATAKA MUNICIPALITIES ACT, 1964 - Section 94: [H.N.Nagamohan Das,J] Tax on telecommunication towers - Challenge as to - Held, Article 265 of Constitution of India specifies that no tax shall be levied or collected except by authority of law. Article 243-H empowers the Legislature of a State to enact authorizing the panchayats to levy and collect taxes, duties, tolls and fees. So also Article 243-X empowers the State Legislature to enact the law authorizing the Minicipalities to levy and collect taxes, duties, tolls and fees. The Government of Karnataka had enacted the Municipalities Act, 1964, KMC Act, 1976 and the Panchayath Raj Act, 1993. Under these three Acts necessary provisions are made for levy of taxes, fees cess, etc. Provisions are also made for issue of licenses. The powers under these three acts do not specify authorizing the local bodies under these three enactments to levy and collect the annual permission fee and installation charges in respect of mobile tele-communication towers. Further, the provisions under these three Acts do not specify that the cellular companies are required to obtain licenses and permissions for providing telecom service. In the absence of any such authority under these three enactments, the local bodies are barred from levying and collecting any fee or installation charges on petitioner and other cellular companies for providing telecom service.
        The petitioners are registered infrastructure provider category-I with the Government of India, Ministry of Communication and IT, Department of Telecommunications under Section 4 of the Indian Telegraph Act. The Government of India has also issued registration certificates under the Indian Telegraph Act, 1885 to the petitioners to operate cellular mobile telephone services in Karnataka Telecom Circle Service. It is on the strength of the certificates issued under the Telegraph Act, the petitioners are erecting the mobile towers in defferent parts of the Country including the State of Karnataka for providing cellular mobile telephone services. Therefore, the petitioners need not require obtaining any license or permission from the respondent local bodies for providing and operating telegraph services. Even otherwise, the provisions under these three enactments though provide for obtaining license or permission in respect of the areas specified in the schedule mentioned therein, they do not provide to obtain license or permission for providing and operating telegraph service. Therefore, the petitioners who have already obtained the registration certificates under the Telegraph Act need not require obtaining any license or permission from the respondent-local bodies for providing and operating telegraph service.
       KARNATAKA PANCHAYAT RAJ ACT, 1993 - Section 66: [H.N.Nagamohan Das,J] ’Building’ - Held, Erection of telecommunication towers fall within definition of word ’building’ specified under the Acts. Permission/licence from concerned local body is necessary. On completion of erection of tower, then the concerned local body is entitled to levy tax on it.
       TELEGRAPH ACT, 1885 - Section 4: [H.N.Nagamohan Das,J] Licenses under for providing cellular mobile telephone services - Held, Licence is not for purpose of erection of a mobile tower. License obtained under Telegraph Act serves different purpose and license/ permission to be obtained under local bodies serves a different purpose. Petitioners are required to obtain permission/license from local bodies for purpose of erecting mobile towers.

Judgment :-

H.N. Nagamohan Das, J.

In these writ petitions the petitioners have prayed for a declaration that the municipal authorities/local bodies under the provisions of the Karnataka Municipalities Act, 1964 (for short, ‘KMC Act’) and Karnataka Panchayat Raj Act, 1993 (for short, ‘Panchayat Raj Act’) have to authority to make physical demand in respect of telecommunication towers installed in their limits further for a writ of certiorari to quash the demand notices issued by the respondents to the petitioner demanding payment of certain amounts as hereunder:

W.P. NOs Annexures Dated Amount 19530 of 2005 F 8-5-2005 1,40,000/- 7162,7472 and 7473 of 2009 NIL NIL NIL 7163,and 7487 to 7492 of 2009 NIL NIL NIL 7164, 7485 and 7486 of 2009 E1 18-2-2009 3,12,520/- E2 18-2-2009 1,23,039/- E3 18-2-2009 4,31,852/- 7165 and 7474 to 7484 of 2009 G1 26-2-2009 25,000/- G2 4-2-2009 25,000/-G3 18-2-2009 2,39,244/- G4 18-2-2009 89,826 G5 18-2-2009 1,30,453 G6 18-2-2009 1,32,024 G7 18-2-2009 1,30,630 G8 18-2-2009 1,29,268 G9 18-2-2009 1,22,508 G10 18-2-2009 1,30,154 G11 18-2-2009 2,31,981 G12 18-2-2009 1,28,748 G13 18-2-2009 50,000 8124 to 8132 of 2009 E1 18-2-2009 85,980 E3 25-2-2009 32,000 E7 29-1-2009 50,000 8133 and 8134 of 2009 E1 16-3-2009 7,500 E2 4-3-2009 25,000 12368 of 2009 A 22-1-2009 50,000

2. Petitioners contend that they have obtained licence from the Department of Telecommunications, Ministry of Communications, Government of India under the Indian Telegraph Act, 1885 to provide infrastructure support and assistance to telecom service providers. In terms of the licence, petitioners are establishing telecommunication network and as a part of it, they are erecting and installing base trans-receiver stations/telecommunication towers all over the State of Karnataka and within the limits of various local bodies. Petitioners are erecting and installing the towers on private properties after obtaining necessary permission by way of lease or licence from the respective owners. Since the local bodies are creating problems for the petitioners in the matter of erecting towers by insisting them to obtain no objection certificate, licence, permission etc., petitioners approached Government of Karnataka for a general direction to all the local bodies. Reacting to the request of the petitioners and others, Government of Karnataka issued a circular on 2-3-2005 permitting them to install and erect the towers subject to the following conditions.

(i) The companies shall ensure safety of the structure and upon which the tower is erected and also the stability of the tower itself.

(ii) The companies shall be bound by any levy imposed by the local bodies.

(iii) The companies shall be responsible for the safety to general public

(iv) The companies shall abide by all the applicable rules and regulations.

3. Despite this general Circular dated 2-3-2005 issued by the Government of Karnataka, the local bodies/respondents are issuing demand notices as stated above to pay licence fee/tax/charges/cess etc. Aggrieved by this action of the respondents and local bodies, petitioners are before this Court.

4. Sri Vijayashankar, learned Senior Counsel for the petitioners contend that under the provisions of Indian Telegraph Act licences are issued in favour of the petitioners by collecting necessary licence fee. Therefore, the petitioners are not liable to pay any other fee or licencce charges to the local bodies/ respondents under the provisions the three enactments-Municipalities Act, KMC Act and Panchayat Raj Act. Under the provisions of these three Acts, respondent-local bodies can only levy property tax in respect of land and buildings and as such they are not entitled to collect any fee/tax or cess from the petitioners for erecting telecommunication towers. The demand of respondent local bodies is therefore contrary to the provisions of the Acts referred to above. It is contended that the power to levy tax under the provisions of the above thr

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