Sunday, December 18, 2016

[CROMA] Mobile Towers Come Within Ambit of ‘Land And Building’ For Levying 'Property Tax' : says the Supreme Court

 

A two judge bench of the Supreme Court recently in "Ahmedabad Municipal Corporation v GTL Infrastructure Ltd. & Ors." has held that mobile towers come within the fold of 'land and building' appearing in 21 Entry 49 List II of the Seventh Schedule of the Constitution and can be termed as a 'building' for the purposes of levy of Property Tax. 


Deciding the issue, Court held that the measure of the levy, though may not be determinative of the nature of the tax . Under both the Acts read with the relevant Rules, tax on Mobile Towers is levied on the yield from the land and building calculated in terms of the rateable value of the land and building. 

Also the incidence of the tax is not on the use of the plant and machinery in the Mobile Tower; rather it is on the use of the land or building, as may be, for purpose of the mobile tower. That the tax is imposed on the "person engaged in providing telecommunication services through such mobile towers" (Section 145A of the Gujarat Act) merely indicates that it is the Occupier and not the Owner of the land and building who is liable to pay the tax.

The Court further held that such a liability to pay the tax by the Occupier instead of the Owner is an accepted facet of the tax payable on land and building .

Viewed in the light of the above discussion, if the definition of "land" and "building" contained in the Gujarat Act is to be understood, we do not find any reason as to why, though in common parlance and in everyday life, a Mobile Tower is certainly not a Building, it would also cease to be a building for the purposes of Entry 49 List II so as to deny the State Legislature the power to levy a tax thereon. Such a law can trace its source to the provisions Entry 49 List II of the Seventh Schedule to the Constitution.

Copy of judgement dated 16.12.2016 attached herewith is shared for reference and reading in Public Interest


Best Regards

Akhil P Chhabra

Advocate

B-024


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Posted by: Akhil Pal Chhabra <75chhabra@gmail.com>
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