December 16, 2016 10:16:37 pm
In a setback to cellular phone operators, the Supreme Court on Friday ruled that state governments can impose property tax on mobile towers as the levy was not on the use of the plant and machinery but the land and building. The apex court delivered its judgement to this effect after setting aside the 2013 verdict of the Gujarat High Court holding that the levy of property tax on mobile towers by state government was beyond its competence.
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A Bench comprising Justices Ranjan Gogoi and P C Pant held as valid the provision of the Gujarat Provincial Municipal Corporations Act imposing tax on on mobile towers on the ground that they were within the fold of “land and building” as defined in the law.
The apex court said though in common parlance and in everyday life a mobile tower was certainly not a building, there was no reason why it should not be considered as a building for levy of the tax under Entry 49 List II of the Seventh Schedule of the Constitution.
List II of the Seventh Schedule of the Constitution enumerates the items on which a state government can make law and Entry 49 refers to land and buildings.
“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,” the bench said.
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