IMPORTANT POINTS
Being a Central Government undertaking or the Union Government itself, they do not merit consideration, since the buildings owned by the Union of India itself are liable to pay service charge as per Rule 21 of Rules, 1996.

JUDGMENT :

SHAJI P. CHALY, J.

Petitioner in the writ petition has filed the appeal challenging the judgment of the learned single Judge declining interference to Ext.P6 demand notice dated 09.03.2011 issued by the Secretary, Njarakkal Grama Panchyat directing the appellant to pay service charge in accordance with Rule 21 of the Kerala Panchayat Raj (Building Tax and the Surcharge thereon) Rules, 1996 (for short 'Rules, 1996) amounting to Rs.9954/-from 2008-2009, to 2010-2011.

2. Brief material facts for the disposal of the writ petition are as follows:

Appellant is a company incorporated under the Companies Act, 1956 on and with effect from 15.09.2000, and wholly owned by the Government of India. Appellant company took over the business of providing telecom services and network management from the Central Government Department of Telecom Services and Telecom Operations with effect from 01.10.2000 on “going concern” basis. The case put forth by the appellant is that it is a Government of India enterprises, which provide telecommunication services all over India. The properties and buildings acquired by the Department of the Telecom are still in the name of the Union of India and to be precise, in the name of the President of India. Though the said buildings and properties are now under the occupation of the appellant, they have not been transferred as such to the appellant and therefore, the appellant is entitled to get exemption from the payment of all kinds of taxes under Article 285 of the Constitution of India. However, in contravention to the protection granted under the Constitution, the Secretary of the Grama Panchayat has issued demand notice as per Exts.P5 and P6 claiming the aforesaid amount towards service charge. Eventhough appellant made a request to recall notice interfering with the privilege under Article 285 of the Constitution of India, same was not considered and issued Exts.P8 and P9 notices intimating that if the amount as demanded is not paid, steps will be taken for prosecution. It was under the said backdrop, the writ petition was filed by the appellant.

3. Learned single Judge, after taking into account the arguments advanced by the respective parties and appreciating Article 285 of the Constitution of India and Rule 21 of Rules, 1996, has arrived at a conclusion that the service charge is not exempted under Article 285 of the Constitution of India and the Central Government is liable to pay service charge to the Panchayat as provided under Rule 21 of the Rules, 1996.

4. The paramount contention advanced by the appellant is that the buildings are under the name of the President of India and therefore, the Grama Panchayat is not entitled to collect tax in the guise of service charges and mere change of the word 'tax' to 'service charges' will not enable the Grama Panchayat to collect the service charge overlooking the privilege conferred under Article 285 of the Constitution of India.

5. We have heard learned counsel for the appellant, Smt. S.K. Devi, learned Senior Government Pleader Sri. Tek Chand and Adv. S. Shanavas Khan for the Secretary of the Grama Panchayat, and perused the pleadings and documents on record.

6. The paramount contention advanced by the learned counsel for the appellant is that since properties belonging to the appellant is still in the name of the Government of India, the appellant is entitled to get protection under Article 285 of the Constitution of India. It is also submitted that the Grama Panchayat has issued demand towards the property tax in the guise of service charges and therefore, the demand raised is illegal and arbitrary and violative of Article 285 of the Constitution of India. It is also submitted that Rule 21 of Rules, 1996 is ultravires Article 285 of the Constitution of India, since such a rule is constituted for imposing service charge overlooking the privilege conferred on the Government of India from not being taxed on its properties.

7. On the other hand, learned coun