Supreme Court of India
AHMEDABAD MUNICIPAL CORPORATIONversusGTL INFRASTRUCTURE LTD. & ORS. ETC.
- Citation
- 2016 INSC 1153
- Decided
- 16 December 2016
- Disposal
- Disposed off
- Bench
- RANJAN GOGOI
Holding
Mobile towers are deemed to be "land and building" under Entry 49 of List II, so the State may levy tax on them and the tax is payable by the occupier.
Summary
The Supreme Court examined whether Gujarat's municipal tax provisions could levy a tax on mobile telephone towers. The petitioners (Ahmedabad Municipal Corporation) argued that mobile towers are not "land or building" under Entry 49 of List II of the Seventh Schedule, rendering the tax ultra‑violet. The Court interpreted the constitutional entry liberally, holding that "land" and "building" have a broad, inclusive meaning that embraces structures such as mobile towers. Consequently, the State Legislature has the competence to tax mobile towers, and the tax is payable by the occupier (the telecom operator) rather than the landowner. The Court set aside the Gujarat High Court’s decision declaring the tax unconstitutional and disposed of the appeals, upholding the tax.
Issues considered
- Whether the levy of tax on mobile towers under the Gujarat Act is within the competence of the State under Entry 49 of List II (taxes on lands and buildings).
- Whether mobile towers fall within the meaning of "land" and "building" for the purpose of Entry 49.
- Whether the tax on mobile towers is payable by the occupier or the landowner.
- Whether Section 145A and related provisions of the Gujarat Provincial Municipal Corporations Act, 1949 are ultra vires the Constitution.
Legislation cited
- Bombay Provincial Municipal Corporations Act, 1949
- Constitution of Indias. Article 246, s. Article 254, s. Article 265, s. Entry 31 List I, s. Entry 49 List II
- Gujarat Local Authorities Laws (Amendment) Act, 2011
- Gujarat Municipalities Act, 1963
- Gujarat Panchayats Act, 1993
- Gujarat Provincial Municipal Corporations Act, 1949s. 127(1), s. 129, s. 141AA, s. 141B, s. 145A, s. 2(30), s. 2(34AA), s. 2(5)
Subjects
property taxmobile towerland and buildingEntry 49constitutional interpretationstate taxation poweroccupier liability
Judgment
[2016] 11 S.C.R. 172
A AHMEDABAD MUNICIPAL CORPORATION
v.
GTL INFRASTRUCTURE LTD. & ORS. ETC.
(Civil Appeal Nos. 5360-5363of2013)
B DECEMBER 16, 2016
[RANJAN GOGOi AND PRAFULLA C. PANT, JJ.)
Gujarat Provincial Municipal Corporations Act, 1949 - ss.
145A, 127(1), 2(5), (30), (34AA) - Levy of property tax on mobile
towers - Held: Mobile towers comes within the fold of 'land and
c building' appearing in Entry 49 List II of the Seventh Schedule -
Power of taxation on mobile tower is vested in the State Legislature
under Entry 49 of List II of the Seventh Schedule - Tax would be
payable by the occupier and not the owner of the land and
building - Gujarat Local Authorities Laws (Amendment) Act,
D 2011 - s. 145A - Gujarat Municipalities Act, 1963 - Gujarat
Panchayats Act, 1993 - Bombay Provincial Municipal Corporations
Act, 1949 - Constitution of India - Entry 49, List II. Seventh
Schedule.
Disposing of all the appeals, writ petitions and the
E transferred cases, the Court
HELD: 1.1 The meaning of any Legislative Entry e.g.
"Taxes on lands and buildings" (Entry 49 of List II) should not
be understood by reference to the definition of the very same
expressions appearing in a statute traceable to the particular
F Legislative Entry. In the instant case, though the Gujarat
Provincial Municipal Corporations Act, 1949 defines the
expressions "land" and "building", it would be self defeating to
understand the meaning and scope of Entry 49 of List II by
reference to the definition clauses in the Gujarat Act. Definitions
contained in the statute may at times be broad and expansive;
G beyond the natural meaning of the words or may even contain
deeming provisions. Though the wide meaning that may be
ascribed to a particular expression by the definition in a statute
will have to be given effect to, if the statute is otherwise found to
be valid, it will, indeed, be a contradiction in terms to test the
H validity of the statute on the touchstone of it being within the
172
AHMEDABAD MUNICIPAL CORPORATION v. GTL 173
INFRASTRUCTURE LTD.
Legislative Entry, by a reference to the definition contained in A
the statute.(Para 14] (181-C-E]
1.2 The second aspect, is one concerning the permissible
operation of two different statutes relatable to two different
Entries in List I or II or even in List Ill of the Seventh Schedule
to the Constitution. This has been acknowledged by the High B
Court, in the impugned Order, by accepting that even if a mobile
tower is a part of the apparatus pertaining to "telegraphs" covered
by Entry 31 of List I, yet, the Gujarat Act could still co-exist as a
statute levying a tax on lands and buildings so long and if only
mobile towers can come within the scope and ambit of the said
expressions "land and building" in Entry 49 of List II. The c
endeavour, therefore, must be to trace out the true meaning of
the expressions "land and building" appearing against Entry 49
of List II by a correct application of the parameters and principles
governing the interpretation ofa Constitutional provision specially
an Entry in any of the legislative fields under the Seventh Schedule D
to the Constitution. (Para 15](181-F-H; 182-A]
1.3 The fields of taxation on which the Union Parliament
and State legislatures are competent to enact legislations to meet
the constitutional mandate under Article 265 of the Constitution
are clearly indicated in the respective Lists. While there can be E
no encroachment either way, it is possible that in a given situation
though there may be some similarity between the taxes levied
by a Central and a State enactment, both can co-exist having
regard to the subject of the levy. A tax on income derived from
land and a tax on the land itself wherein the income or earning
therefr.>m forms the basis of the rates of the levy of tax. Even if it F
is assumed that the cellular operators are right in contending
that mobile towers are covered by the field "telegraphs" (Entry
31 of List I), it cannot be said that if mobile towers can come
within the fold of Entry 49 of List II, such a legislation would be
legislatively incompetent. [Para 20) [184-F-H] G
1.4 A cardinal principle of interpretation of a Legislative
Entry in any of the Lists of the Seventh Schedule is to treat the
words and expressions therein as inclusive in meaning and give
the same all possible flexibility instead of restricting such meaning
to the perceptions contemporaneous with the times when the .H
174 SUPREME COURT REPORTS [2016) 11 S.C.R.
A Constitution was framed. The Constitution, an organic document,
has to be allowed a natural growth by such a process of
interpretation. Interpretation of a Legislative Entry has to grow
and keep up with the pace of times. [Para 24] [188-B-C]
1.5 To test the vires of the provisions of the statute in
B question the scope and expanse of the words 'land' and 'building'
has to be understood in the context of the provisions of the
Legislative Entry (Entry 49 List JI) and not the Statute relatable
to the Entry. However, what would be of significance is to take
into account the principles of interpretation which were followed
by this Court in coming to its conclusions with regard to the true
c meaning and scope of the expressions 'land' and 'building'
contained in the statute. The principles of interpretation of the
ordinary statute are not foreign to the principles of interpretation
of the constitutional provisions. [Para 27) [189-G; 190-A-B]
1.6 The discussions on the financial relations between the
D Union and the States would suggest a constitutional scheme
wherein the federating States of the Indian Union are not destined
to remain financially weak despite a situation where the Union
undoubtedly has the upper hand by an allocation of the more
lucrative subjects of taxation under the Seventh Schedule.
E Constitutionality of the Gujarat Act must be answered in favour
of the State. [Para 27)(191-A-B]
1.7 The expression "building" appearing in Entry 49 List
II of the Seventh Schedule in view of the settled principles that
would be applicable to find out the true and correct meaning of
F the said expression it will be difficult to confine the meaning of
the expression "building" to a residential building as commonly
understood or a structure raised for the purpose of habitation.
[Para 28) [191-C]
1.8 The regulatory power of the Corporations,
G Municipalities and Panchyats in the matter of installation, location
and operation of 'Mobile Towers' even before the specific
incorporation of Mobile Towers in the Gujarat Act by the 2011
Amendment and such control under the Bombay Act at all points
of time would also be a valuable input to accord a reasonable
extension of such power and control by understanding the power
H of taxation on 'Mobile Towers' to be vested in the State
AHMEDABAD MUNICIPAL CORPORATION v. GTL 175
INFRASTRUCTURE LTD.
Legislature under Entry 49 of List II of the Seventh Schedule. A
(Para 29] (191-F)
1.9 The measure of the levy, though may not be
determinative of the nature of the tax, cannot also be altogether
ignored. Under both the Acts read with the relevant Rules, tax
011 Mobile Towers is levied on the yield from the land and building B
calculated in terms of the rateable value of the land and building.
Also the incidence of the tax is not 011 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" c
(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. 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 under Entry 49 List II of the Seventh Schedule. (Para D
30) (191-G-H; 192-A-B)
1.10 If the definition of "land" and "building" contained in
the Gujarat Act is to be understood, there is no 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 E
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. [Para 31] [192-C-D]
1.t: The judgment passed by the Gujarat High Court is set F
aside and the appeals arising from the order of the Bombay High
Court; transferred cases and the writ petitions are answered
accordingly. (Para 33) (192-F]
Synthetics and Chemicals Ltd. vs. State qf Uttar Pradesh
(1990) 1 SCC 109 : 1989 (1) Suppl. SCR 623 ; Good G
Year India Ltd vs. State qf Haryana & Anr. A~ 1990
SC 781 : 1989 (1) Suppl. SCR 510; State of West Bengal
vs. Kesoram Industries Ltd. (2004) 10 SCC 201 : 2004
(1) SCR 564; Trutuf Safety Glass Industries vs.
Commissioner of Sales Tax, U.P. (2007) 7 SCC 242 :
2007 (8) SCR 860; India Cement vs. State of Tamil Nadu H
176 SUPREME COURT REPORTS f20161 I I S.C.R.
A (1990) 1 sec 12 : 1989 (1) Suppl. SCR 692;
Jagannath Baksh Singh vs. State of U.P. AIR 1962 SC
1563 : 1963 SCR 220; Elel Hotels & !11vest111e11ts Ltd.
& Ors. vs. u.0.1. (1989) 3 sec 698 : 1989 (2) SCR
880; In re. The Bill to a111e11d Section 20 of the Sea
Customs Act, 1878 and Section 3 of the Central Excise
B
and Salt Act, 1944 : 1964 (3) SCR 787; Anant Mills
Co. Ltd. Vs. State of Gujarat and Others (1975) 2 SCC
175 : 1975 (3) SCR 220; Goodricke Group Ltd. and
Others vs. State of W.B. and Others (1995) 1 Supp SCC
707 : 1994 (6) Suppl. SCR 120; Ajoy Kumar Mukherjee
c vs. Lpcal l}oard of Barpeta AIR 1965 SC 1561 : 1965
SCR 47; Municipal Corporation of Greater Bombay
AIR 1991 SC 686 : 1990 (3) Suppl. SCR 365;
Govern111e11t of Andhra Pradesh and Others vs.
Hindustan Machine Tools Ltd. AIR 1975 SC
2031 : (1975) 2 sec 274 : 1975 Suppl. SCR 394 -
D
referred to.
Stroud's Judicial Dictionary Fifth Edn.; Black's Law
Dictionary Seventh Edn;; P. Ra111anatha A~yar 's Law
Lexicon Second Edn.; Stroud's Judicial Dictionary Fifth
Edn; Black's Law Dictionary Fifth Edn.; P. Ramanatha
E Aiyar 's Law Lexicon Second Edn.; Collins Dictionary
ef the Eng_lislJ.. Lan!{Ual{e First Edn. 1979 - referred
to.
Case Law Reference
F1989 (1) Suppl. SCR 623 referred to Para 16
1989 (1) Suppl. SCR 510 referred to Para 16
2004 (1) SCR 564 referred to Para 16
2007 (8) SCR 860 referred to Para 16
1989 (1) Suppl. SCR 692 referred to Para 16 ·
G 1963 SCR 220 referred to Para 16
1989 (2) SCR 880 referred to Para 16
1964 (3) SCR 787 referred to Para 17
1975 (3) SCR 220 referred to Para25
1994 (6) Suppl. SCR 120 referred to Para26
H
AHMEDABAD MUNICIPAL CORPORATION v. GTL 177
INFRASTRUCTURE LTD.
1965 SCR 47 referred to Para 26 A
1990 (3) Suppl. SCR 365 referred to Para 27
1975 Suppl. SCR 394 referred to Para 28
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 5360-
5363 of2013.
B
From the Judgment and Order dated 24-25.04.2013 of the High
Court of Gujarat atAhmedabad in Special Civil Application No. 4084/
2012, 3411/2012, 15596/2012 and 3787/2013
WITH
C. A. Nos. 5364, 5365, 6385-6387, 673 7-6738, 6739, 6836-6926, C
7865-7894, 8114, 8115, 8116 and 8117of2013,
C. A. No. 2854-2855 of2014,
C. A. No. 5348 of2015,
C.A.Nos.12209, 12211, 12212, 12213, 12214-12215, 12216, 12217, D
12218, 12219, 12220,12221,12222,12223,12224, 12225, 12226, 12227,
12228, 12229, 12230, 12231, 12232, 12233, 12234, 12235 and 12236of
2016,
W. P. (C) Nos. 216, 611 and 577 of2015,
T. C. (C) Nos. 128, 130, 129 and 131 of2015. E
Ms. Pinki Anand, ASG, Prag P. Tripathi, Prashant G. Desai, K. V.
Vishwanathan, K. Kumar, Mihir Joshi, Gopal Jain, Gourab Banerji,
Sr. Advs., Preetesh Kapoor, Ms. Hemantika Wahi, Ms. Aagam Kaur,
Ms. Puja Singh, Mohit Paul, Dhaval Nanavati, Ms. Diksha Jhingan,
D. N. Ray, Lokesh K. Choudhary, Mrs. Sumita Ray, K. N. Rai, Chinmoy F
Pradip Sharma, Ms. Gauri Subramanium, Sayan Ray, lshan Das, Puneet
Taneja, Aman Gandhi, Ms. Bindi Girish Dave, Ms. Prinaz Vakil, Vivek
A. Vashi, Anush Raajan, Sandeep Deshmukh, Nar Hari Singh, Venkita
Subramoniam T. R., Pavan Kumar, R. N. Pareek, Ajit Kulshreshtha,
Santosh Sachin, Ms. Manali Singhal, Abhijat P. Medh, Deepak Singh
Rawat, Rohit Kaul, Mahesh Agarwal, Ms. Shally Bhasin, Lakshmeesh G
. Karnath, Rishab Gupta, Raghav Pandey, Abhishek Kaushik, E. C.
Agrawala, Dhananjay Bhaskar, Ravi Raghnath, Shamik Bhat, Purvish
Jitendra Malkan, Ms. Dharita Malkan, Jitendr Malkan, Ms. Arunima
Singh, Sameer Parekh, Ms. Rukhmini S. Bobde, Abhishek Vinod
Deshmukh, Ms. Sanjana Ramachandran, Stephenie Sonawane (for M/s.
H
178 SUPREME COURT REPORTS (2016] 11 S.C.R.
A Parekh & Co.), Sahil Tagotra (For Mis. Parekh & Co.), Vinay Navare,
K. B. Gwen, V. N. Raghupathy, D. M. Nargolkar, Ms. Abha R. Shmma,
Ms. Jayashree Wad, Ashish Wad, Ms. Promita Majumdar, Ms. Jaya
Khanna, Mis. J. S. Wad & Co., Suhas Kadam (For Mis. Lemax Lawyers
& Co.), Vijay Kumar, Ms. Apama Jha, Arvind S. Avhad, Nishant
Ramakantrao Katneshwarkar, Arpit Rai, Ms. Kiran Bhardwaj, S. S.
B
Rawat, D. S. Mahra, C. George Thomas, Ejaz Maqbool, Ms. Bansuri
Swaraj, Ms. Shreya Bhatnagar, Raghunatha Sethupathy, Nimimesh
Dubey, Nikhil Guliani,Advs. with them for the appearing parties.
The Judgment of the Court was delivered by
c RANJAN GOGOi, J. I. Delay condoned. Leave granted in all
the special leave petitions.
2. This group of cases may be conveniently arranged in four
different categories. The first are the appeals arising from the judgment
and order dated 24125.04.2013 passed by the Gujarat High Court declaring
D Section l 45A of the Gujarat Provincial Municipal Corporations Act, 1949
(hereinafter referred to as "the Gujarat Act") as ultra vires the
Constitution and on that basis interdicting the levy of property tax on
"mobile towers". The High Court, by the impugned judgment, however,
took the view that the Cabin in a mobile tower in which BTS system,
details of which are noticed below, is located, would be a building and,
E therefore, exigible to tax under the Gujarat Act. The State Government
and th~ different Municipal Corporations have cha] lenged the first part
of theiorder of the High Court whereas the Cellular operators have
challenged the later part.
3. The Bombay High Court which was in seisin of a somewhat
Fsimilar challenge, by the order under challenge, has taken the view that
the writ petitions challenging the levy of property tax on mobile towers
should not be entertained and the aggrieved writ petitioners therein (cellular
operators) should be left with the option of exhausting the alternate
remedies provided by the Act. This would be the third category of cases.
G In this regard, it must be noticed that in the Bombay Provincial Municipal
Corporations Act, 1949, the charging section does not specifically
contemplate levy of taxes on mobile towers as in the Gujarat Act. The
impugned levy, nevertheless, was imposed on the reasoning that mobile
towers are buildings as defined in the Act. At this stage, it must also be
noticed that the Bombay Provincial Municipal Corporations Act, 1949
H
AHMEDABAD MUNICIPAL CORPORATION v. GTL 179
INFRASTRUCTURE LTD. [RANJAN GOGOi, J.]
was applicable to the State of Gujarat also until the year 2011 when by A
the Gujarat Short Titles (Amendment) Act, 2011 the word 'Gujarat' has
been inserted in place of the word 'Bombay'.
4. The fourth and fifth categories of cases would be the writ
petitions raising identical issues which have been transferred from the
Bombay High Court to this Court and the writ petitions filed before this B
Court by the cellularoperators under Article 32 of the Constitution raising
a similar challenge as in the writ petitions filed before the High Court.
5. As the elaborate arguments advanced in the course of the
prolonged hearing have centered around the provisions of the Gujarat
Act, it may be convenient to take up the Gujarat cases in the first instance. C
The answer to the issues arising therein would, in any way, effectively
decide the issues arising in the Bombay cases also as well as in the
transferred cases and the writ petitions filed under Article 32 of the
Constitution.
6. The relevant provisions of the Gujarat Act defining the D
expressions "building'', "land" and "mobile tower" are as follows:
"Section 2(5) "building" includes a house, out-house, stable,
shed, hut and other enclosure or structure whether of masonry,
bricks, wood, mud, metal or any other material whatever whether
used as a human dwelling or otherwise, and also includes E
verandahs, fixed platforms, plinths, doorsteps, walls including
compound walls and fencing and the like.
xxx xxx xxx xxx xx.x
Section 2(30) "land" includes land which is being built upon or
is built upon or covered with water, benefits to arise out of land, F
things attached to the earth or permanently fastened to anything
attached to the earth and rights created by legislative enactment
over any street.
xxx xxx xxx xxx xxx
Section 2(34AA) "Mobile tower" means a temporary or G
permanent structure, equipment or instrument erected or installed
on land or upon any part of the building or premises for providing
telecommunication services."
7. Section 127(1) of the Gujarat Act, the charging section, is in
H
180 SUPREME COURT REPORTS f20161 11 S.C.R.
A the following tenns:
"127. Taxes to be imposed under this Act.-
(1) For the purposes of this Act, the Corporation shall impose
the following taxes, namely:-
(a) Property taxes either under section 129 or under section
B 141AA.
(b) a tax on vehicles, boats and animals.
(c) a tax on mobile towers:
Providedthatxxx xxx xxx xxx xxx xxx xxx
C 8. Section 129 of the Gujarat Act deals with different components
of the property tax which can be levied under the Act. Briefly put the
said components are water tax; conservancy and sewerage tax; general
tax of not less than 12% but not exceeding 30% of the rateable value
etc.
D
9. Section 141AA deals with the rate at which water tax,
conservancy tax and sewerage tax are to be imposed. Section 141B of
the Gujarat Act provides for the rate at which the general tax is leviable.
I 0. Section I 45A (inserted by the Gujarat Local Authorities Laws
(Amendment) Act, 20 I I) provides for tax on mobile towers at rates not
exceeding those prescribed by order in writing by the State Governme11t.
E
Such tax which is levied on mobile towers is to be collected from persons
engaged in providing telecommunication services through service towers.
Section I 45A is in the following terms.
"145A Tax on mobile towers.-
( I) A tax at the rates not exceeding those prescribed by order in
F
writing by the State Government in this behalf from time to time
shall be levied on mobile towers from the person engaged in
providing telecommunication services through such mobile
towers.
(2) The Corporation shall from year to year, in accordance with
G Section 99, determine the rates at which the tax shall be levied."
11. By the aforesaid Gujarat Local Authorities .Laws
(Amendment) Act, 20 I I similar provisions for levy oftax on mobile towers
have been inserted in the Gujarat Municipalities Act, 1963 and also the
Gujarat Panchayats Act, I 993.
H
AHMEDABAD MUNICIPAL CORPORATION v. GTL 181
INFRASTRUCTURE LTD. [RANJAN GOGOI, J.)
12. The short contention of the cellular operators advanced before A
the High Court is that Section 127(1)(c) read with Section 145A of the
Gujarat Act are legislatively incompetent as mobile towers are beyond
the scope of Ent!)' 49 of List II of the Seventh Schedule to the Constitution
which is in the following terms.
"49. Taxes on lands and buildings." B
13. The High Court thought it proper to accept the said contention
and on that basis to hold that levy of tax on mobile towers under the
Gujarat Act is ultra vires the Constitution except insofar as the Cabin
that houses the BTS system is concerned.
14. Two significant aspects connected to the issues arising may c
be taken note of at the outset. The meaning of any Legislative Ent!)' e.g.
"Taxes on lands and buildings" (Ent!)' 49 of List II) should not be
understood by reference to the definition of the vety same expressions
appearing in a statute traceable to the particular Legislative Ent!)'. In the
present case, though the Gujarat Act defines the expressions "land" and D
"building", as rightly held by the High Court, it would be selfdefeating to
understand the meaning and scope of Ent!)' 49 of List JI by reference to
the definition clauses in the Gujarat Act. Definitions contained in the
statute may at times be broad and expansive; beyond the natural meaning
of the words or may even contain deeming provisions. Thoqgh the wide
meaning that may be ascribed to a particular expression by the definition E
in a statute will have to be given effect to, if the statute is otherwise
found to be valid, it will, indeed, be a contradiction in terms to test the
validity of the statute on the touchstone ofit being within the Legislative
En tty, by a reference to the definition contained in the statute.
15. The second aspect, mentioned above, is one concerning the F
permissible operation of two different statutes relatable to two different
Entries in List I or II or even in List III of the Seventh Schedule to the
Constitution. This has been acknowledged by the High Court, in the
impugned Order, by accepting that even ifa mobile tower is a part of the
apparatus pertaining to "telegraphs" covered by Ent!)' 31 of List I, yet, G
the Gujarat Act could still co-exist as a statute levying a tax on lands and
buildings so long and if only mobile towers can come within the scope
and ambit of the aforesaid expressions "land and building" in Ent!)' 49 of
List II. The endeavour, therefore, must be to trace out the true meaning
of the expressions "land and building" appearing against Entty49 of List
II by a correct application of the parameters and principles governing H
182 SUPREME COURT REPORTS [2016] 11 S.C.R.
A the interpretation ofa Constitutional provision specially an Entry in any
of the legislative fields under the Seventh Schedule to the Constitution.
16. Certain accepted and settled principles of Constitutional
interpretation may now be taken note of. It will not be necessary to
enter into any detailed deliberations and debate in this regard in view of
B the undisturbed precedents on which such principles have come to rest.
Broadly and illustratively some of the principles which have been culled
out from the decisions of this Court are enumerated hereinbelow.
(i) In interpreting the provisions ofthe Constitution, particularly
the Legislative Entry, a broad, liberal and expansive
c interpretation is to be preferred as the meaning of an Entry
is always inclusive. [Syntltetics tmd Cltenricflls Ltcl vs.
State of Uttar Pradeslt 1]
(ii) Principles of interpretation of a statute are not foreign and
altogether irrelevant for the purposes of interpreting a
D constitutional provision and/or a specific Legislative Entry.
[Good Year India Ltd. vs. State ofHaryana & Anr. 2]
(iii) A Constitution is an organic document that must grow and
live with the times. [Sl<tle of West Beng<tl vs. Kesor<tnr
Industries Ltd. 3 ]
E (iv) The spirit of the Constitution, the constitutional goals; and
the constitutional philosophy must guide the broad and liberal
interpretation of a Legislative Entry. [Stflle of West Beng<tl
vs. Kesor<tnr Industries Ltd.•]
(v) The dictionary meaning and the common parlance test can.
F also be adopted. [Trutuf Sflfety Glflss Industries vs.
Commissioner of Sales T(IX, U.P. 5 ]
(vi) Words and expressions in a constitutional provision or
Legislative Entry should not be given an unnatural meaning.
[lndit1 Cement vs. State of T<tmil N"'lu 6]
G
1
( 1990) 1 sec J09 Para 67
'AIR 1990 SC 781Para17
3
(2004) JO SCC 201 Para 50
'(2004) 10 SCC 201 Para 31
' (2007) 7 SCC 242 Para 13
H "(1990) 1sec12Para18
AHMEDABAD MUNICIPAL CORPORATION v. GTL 183
INFRASTRUCTURE LTD. [RANJAN GOGOi, J.]
(vii) If a general word is used in a constitutional Entry, it must A
be construed as to extend all ancillary and subsidiary matters
that can be reasonably included. [Jltgltmu1t/1 Bltks/1 Sing/1
vs. Stllte of U.P. 7; Elel Hotels & Investments Ltd. &
Ors. vs. U.O.L".J
The abovesaid principles which are firmly entrenched as principles of B
Constitutional interpretation must be borne in mind while proceeding
further in the case.
17. In re. T/1e Bill to ltmend Secti011 20 of t/1e Sea Customs
Act, 1878 and Section 3 of tile Central Excise and Sall Act, 19449,
a Bench of nine Judges of this Court has observed that, c
"Neither the Union nor the States can claim unlimited rights as
regards the area of taxation. The right has been hedged in by
considerations of respective powers and responsibilities of the
Union in relation to the States, and those of the States in relation
to citizens inter se or in relation to the Union. Part XII of the D
Constitution relates to Finances. At the very outset Article 265
lays down that "No tax shall be levied or collected except by
authority of law." That authority has to be found in the three
Lists in the Seventh Schedule subject to the provisions of Part
XI which deals with relations between the Union and the States,
particularly Chapter I thereofrelating to legislative relations and E
distribution oflegislative powers with special reference to Article
246."
18. Article 246 is in the following terms:
(I) Notwithstanding anything in clauses (2) and (3), Parliament
F
has exclusive power to make laws with respect to any of
the matters enumerated in List I in the Seventh Schedule
(in this Constitution referred to as the "Union List").
(2) Notwithstanding anything in clause (3), Parliament, and,
subject to clause (I), the Legislature of any State also, have
G
power to make laws with respect to any of the matters
enumerated in List III in the Seventh Schedule (in this
Constitution referred to as the "Concurrent List").
~~~~~~~~~
7
AIR I962 SC I 563 Para IO
• (1989) 3 sec 698 Para 14
9
I964 (3) SCR 787 H
184 SUPREME COURT REPORTS f2016l 11 S.C.R.
A (3) Subject to clauses (I) and (2), the Legislature of any State
has exclusive power to make laws for such State or any
part thereof with respect to any of the matters enumerated
in List II in the Seventh Schedule (in this Constitution
referred to as the "State List").
8 (4) Parliament has power to make laws with respect to any
matter for any part of the territory oflndia not included (in
a State) notwithstanding that such matter is a matter
enumerated in the State List"
19. Though Article 246 has often been understood to be laying
down the principle of Parliamentary supremacy, it must be qualified that
C ·such supremacy, ifany, is extremely limited and very subtle. This has to
be said when the federal structure of the Indian Union has been
recognised as a basic feature of the Constitution. Both, the Central and
the State legislatures, are competent to enact laws in any matters in
their respective Lists i.e. List I and List II. Conflict or encroachments
D must be ironed out by the Courts and only on a failure to do so the
provisions ofArtiCle 246 will apply. Insofar as the common List i.e. List
III is concerned, any repugnancy in law making by the Union and State
Legislatures is dealt with by Article 254 which gives primacy to the
Parliamentary law over the State law subject to the provisions of clause
(2) of Article 254 of the Constitution which again is subject to a proviso
E which may indicate some amount of Parliamentary supremacy.
20. The fields oftaxation on which the Union Parliament and State
legislatures are competent to enact legislations to meet the constitutional
mandate under Article 265 of the Constitution are clearly indicated in
the respective Lists. While there can be no encroachment either way, it
F is possible that in a given situation though there may be some similarity
between the taxes levied by a Central and a State enactment, both can
co-exist having regard to the subject of the levy. A tax on income derived
from land and a tax on the land itself wherein the income or earning
therefrom forms the basis of the rates of the levy of tax is one such
G example. The above has been illustrated only to answer the arguments
advanced before us on view expressed, in the order under challenge, by
the High Court that even if it is assumed that 1he cellular operators are
right in contending that mobile towers are covered by the field "telegraphs"
(Entry 31 of List I), it cannot be said that if mobile towers can come
within the fold of Entry 49 of List II, such a legislation would be
H legislatively incompetent.
AHMEDABAD MUNICIPAL CORPORATION v. GTL 185
INFRASTRUCTURE LTD. [RAN.JAN GOGOl, J.]
21. The Constitutional scheme with respect to financial relations A
between the Union and the State is dealt with by Part XII of the
Constitution. The scheme discernible contemplates an equitable
distribution of revenues between the Centre and the States. Though the
Union and each of the federating units have their respective consolidated
funds, the financial arrangements and adjustments that are to be found
8
in the different provisions of Part XII of the Constitution would indicate
an attempt at equitable distribution of revenues between the Union and
the federating units even though such revenue may be derived from
taxes and duties imposed by the Union and collected by it or through the
agencies of the States. A perusal of the legislative entries relating to
taxes imposable by the Central and the State legislatures do indicate that c
the larger share of the revenue goes to the Union because of the very
nature of the taxes leviable by the Union Parliament which would stand
credited to the consolidated fund of the Union. The allocation ofrevenue
heads/taxation power in the States certainly shows a disequilibrium which,
however, is sought to be balanced by the constitutional scheme
D
aforementioned, namely, equitable distribution of revenues between the
Union and the States even though such revenues may be derived from
taxes and duties imposed by the Union and collected by it. This aspect
of the Constitutional scheme which has been echoed in para SO of the
decision in State of West Bengal vs. Kesoram Industries Ltd., (supra)
has to be kept in mind as the discussions unfold. E
22. We may now see what a Mobile Tower is and consi:;ts of. In
technical terms a Mobile Tower is called a "Base Transceiver Station."
It involves the making of structure consisting of the following:
a. A pre-fabricated shelter made of insulating PUF material
made of fibres. F
b. Electronic Panel.
c. Base Transceiver Station (BTS) and other radio transmission
and reception equipment."
d. A diesel generator set.
G
e. Six poles of6 to 9 meters length each made of hollow steel
galvanized pipes.
A mobile tower is constructed either on vacant land or on the terrace of
existing buildings on the basis of agreements with the owners of such
properties.
H
186 SUPREME COURT REPORTS [2016) 11 S.C.R.
A 23. To answer the question as to whether such mobile towers can
come within the fold of'land and building' appearing in Entry 49 List II
of the Seventh Schedule it will be useful to tak.e notice of the meanings
of the two expressions as appearing in the leadingjudicial and English
dictionaries. A comprehensive list of the different meanings expressed
in different works so far as the two expressions 'land' and 'building' are
B
concerned are set out below.
LAND
Stroud's Judicial Dictionary (Fifth Edition) defines that' land',
or 'lands', not only means the surface of the ground, but also
c everything (except gold or silver mines) on or over or under it,
for Cujus est so/11111 ejus est usque ad coelum et ad i11/eros
(Co. Litt. 4 a; Touch. 91; 2 Bl. Com. 18; Lord Coke calls the
earth "the suburbs of heaven").
Black's Law Dictionary (Seventh Edition) defines that 'land'
D means an immovable and indestructible three-dimensional area
consisting of a portion of the earth's surface, the space above
and below the surface, and everything growing on or permanently
affixed to it. The lexicographer further observes, "In its legal
significance, 'land' is not restricted to the earth's surface, but
extends below and above the surface. Nor is it confined to solids,
E but may encompass within its bounds such things as gases and
liquids. A definition of' land' along the lines of' a mass of physical
matter occupying space' also is not sufficient, for an owner of
land may remove part or all of that physical matter, as nevertheless
retain as part of his 'land' the space that remains. Ultimately, as
F ajuristic concept, 'land' is simply an area of three-dimensional
space, its position being identified by natural or imaginary points
located by reference to the earth's surface. 'Land' is not the
fixed contents of that space, although, as we shall see, the cwner
of that space may well own those fixed contents. Land is
immovable, as distinct from chattels, which are moveable, it is
G also, in its legal significance, indestructible. The contents of the
space may be physically severed, destroyed or consumed, but
the space itself, and so the 'land', remains immutable." Peter
Butt, Land Law 9 (2"d Edition, I988).
P. Ramanatl1aAiyar's Law Le.1'icon (Second Edition) observes
H
AHMEDABAD MUNICIPAL CORPORATION v. GTL 187
INFRASTRUCTURE LTD. [RANJAN GOGOi, J.]
that the word 'land' is a comprehensive term, including standing A
trees, buildings, fences, stones, and waters, as well as the earth
we stand on. Standing trees must be regarded as part and parcel
of the land in which they are rooted and from which they draw
their support. The word 'land', in the ordinary legal sense,
comprehends everything of a fixed and permanent nature and
8
therefore embraces growing trees. 48 All 498 95 IC 150 = 24
ALJ 583 = 1926 All 689.
BUILDING
Stroucl's Judicial Dictionary (Fifth Edition) observes that what
is a 'building' must always be a question of degree and c
circumstances: its "ordinary and usual meaning is, a block of
brick or stone work, covered in by a roof' (per Esher M.R.,
Moir v. Williams [1892] 1 Q.8. 264). The ordinary and natural
meaning of the word 'building' includes the fabric and the ground
on which it stands (Victoria City i( Bishop of VancouvPr Island
[1921] A.C. 384, at p. 390). D
Black's Law Dictionary (Fifth Edition) observes that 'building'
is a str.ucture designed for habitation, shelter, storage, trade,
manufacture, religion, business, education and the like. A
'building' is also a structure or edifice enclosing a space within
its walls and usually, but not necessarily, covered with a roof. E
P. Ramanat/1aAiyar's Law Lexicon (Second Edition) observes
that 'building' is a house, out-house, garage or any other structure
which cannot be erected without the ground on which it is to
stand; the expression 'building' includes, the fabric of which it is
composed, the ground upon which its walls stand and the ground F
within those walls. (per D.G Gouse & Co. v. State of Kera/a,
AIR 1980 SC 271 [Kerala Building Tax Act ( 1975) S. 2(3)])
DICTIONARY MEANING OF LAND AND BUILDING
'Builcling' is something with a roof and walls, such as a house
G
or factory. (Collins Dictionary of the English Language, First
Edition, 1979)
'Land' refers to the solid part of the suiface of the earth, as
distinct from seas, lakes, etc. (Collins Dictionary of the English
Language, First Edition, 1979)
H
188 SUPREME COURT REPORTS [2016111 S.C.R.
A All other English dictionaries convey a more or less similar
meaning, namely, as understood in common parlance-an enclosed space
used for human use and dwelling. ·
24. A cardinal principle of interpretation of a Legislative Entry in
any of the Lists of the Seventh Schedule is to treat the words and
B expressions therein as inclusive in meaning and give the same all possible
flexibility instead of restricting such meaning to the perceptions
contemporaneous with the times when the Constitution was framed.
The Constitution, an organic document, has to be allowed a natural growth
by such a process of interpretation. Interpretation of a Legislative Entry
has to grow and keep up with the pace of times.
c
25. We may now see how judicial opinion has dealt with the
question.
In Anant Mills Co. Ltd. Vs. Stllle of Gujarltl am/ Ot/1ers 10 this
Court had occasion to consider the scope and ambit of the provisions
D contained in Entry 49 List II in the context of the provisions of the very·
same Act (as applicable to Bombay). Sufficient illumination and
elucidation flows from such consideration which is available in para 44
of the report which may be very conveniently extracted below.
"44. Mr. Tarkunde on behalf of the petitioner Company has urged
E that under Entry 49 of the State List in the Seventh Schedule to
the Constitution, the State Legislature is empowered to enact a
law relating to taxes on lands and buildings. It is submitted that
the State Legislature has no competence under the above entry
to enact a law for levying tax in respect of the area occupied by
the underground supply lines. The word "land'', according !o the
F learned counsel, denotes the surface of the land and not the
underground strata. We are unable to accede to the above
submission. Entry 49 of List II contemplates a levy of tax on
lands and buildings or both as units. Such tax is directly imposed
on lands and buildings and bears a definite relation to it. Section
G 129 makes provision forthe levy of property tax on buildings and
lands. Section 139 merely specifies the persons who wol•ld be
primarily responsible for the payment of that tax. The word "land"
includes not only the face of the earth, but everything under or
over it, and has in its legal signification an indefinite extent upward
-----'a"'n""d....;d""o"'"wnward, giving rise to the maxim, Cujus est so/um ejus ·
H '" (1975)2SCCl75
AHMEDABAD MUNICIPAL CORPORATION v. GTL 189
INFRASTRUCTURE LTD. [RANJAN GOGOi, J.]
est usque ad coelum (see p. 163, 73 Corpus Juris Secondum). A
According to Brooms Legal Maxims, I 0th Edn., p. 259, not
only has land in its legal signification an indefinite extent upwards,
but in law it extends also downwards, so that whatever is in a
direct line between the surface and the centre of the earth by
the common law belongs to the owner of the surface (not merely
8
the surface, but all the land down to the centre of the earth and
up to the heavens) and hence the word "land" which is 110111e11
generalissimum, includes, not only the face of the e11rth, but
everything under it or over it."
26. In Goo<lricke Group Ltd. and Others vs. State of W.B.
and Others 11 cess imposed on green tea (leaves) by weight was held to c
be a tax on land and not on the produce. In an earlier decision in Ajoy
Kumar Mukherjee vs. Local Board of Barpeta 12 a levy on holding a
market was held to be essentially a levy on land and, therefore, authorized
by Entry 49 List II though the levy was imposed only on the de.ys when
the market was held. This Court, in Ajoy Kumar Mukherjee (supra) D
had inter alia held that,
"It follows therefore, that the use to which the land is put can be
taken into account in imposing a tax on it within the meaning of
entry 49 of List II, for the annual value ofland which can certainly
be taken into account in imposing a tax for the purpose of this E
entry would necessarily depend upon the use to which the land
is put. It is in the light of this settled proposition that we have to
examine the scheme ofS. 62 of the Act, which imposes the tax
under challenge."
27. In Municipal Corporation of Greater Bombay 13 the F
definitions of'land' and 'building' in Sections 3(r) and 3(s) of the Bombay
Provincial Municipal Corporations Act, 1949 were dealt with and
considered by this Court and a broad and wide meaning of the said
expressions was favoured. However, we may skip over the said part of
the report in view of what has been earlier indicated by us, namely, that
to test the vires of the provisions of the statute in question the scope and G
expanse of the words 'land' and 'building' has to be understood in the
context of the provisions of the Legislative Entry (Entry 49 List II) and
11 ( 1995)_ ! supp sec 101
12
AIRl965 SC 1561
13
AIR 1991 SC 686 H
190 SUPREME COURT REPORTS [2016] 11 S.C.R.
A not the Statute relatable to the Entry. However, what would be of
significance is to take into account the principles of interpretation which
were followed by this Court in coming to its conclusions with regard to
the true meaning and scope of the expressions 'land' and 'building'
contained in the statute. As already observed by us principles of
interpretation of the ordinary statute are not foreign to the principies of
B
interpretation of the constitutional provisions. Paragraph 18 of the repo11
in Municipal Corporation of Greater Bombay (supra) may now be
noticed.
18. In S.P. Gupta v. Union of India" interpreting Section 123
of the Indian Evidence Act, this Court held that the section was
c enacted in the second half of the last century, but its meaning
and content cannot remain static. The interpretation of every
statutory provision must keep pace with changing concepts and
the values and it must, to the extent to which its language permits
or rather does not prohibit, siif.(er adjustments through _judicial
D interpretation so as to accord with the requirements of the fast
changing society which is undergoing rapid social and ecor..omic
transformation. The language of a statutory provision is not a
static vehicle of ideas and concepts and as ideas and concepts
change, as they are bound to do in any country like ours with the
establishment of a democratic structure based on egalitarian
E
values and aggressive developmental strategies, so must the
meaning and content of the statutory provision undergo a change.
It is elementary that law does not operate in a vacuum. It is not
an antique to be taken down, dusted, admired and put back on
the shelf, but rather it is a powerful instrument fashion.::d by
F society for the purpose of adjusting conflicts and tensions which
arise by reason of clash between conflicting interests. It is,
therefore, intended to serve a social purpose and it cannot be
interpreted without taking into account the social, economic and
political setting in which it is intended to operate. It is here that a
judge is called upon to perform a creative function. He has to
G irtject flesh and blood in the dry skeleton provided by the legis!ature
and by a process of dynamic interpretation, invest it with a meaning
which will harmonise the law with the prevailing concepts and
values and make it an effective instrument for deliveringjustice.
1
' 1981 Supp sec 87
H
AHMEDABAD MUNICIPAL CORPORATION v. GTL 191
INFRASTRUCTURE LTD. [RANJAN GOGOi, J.]
The discussions that had preceded on the financial relations A
between the Union and the States would suggest a constitutiona.1 scheme
wherein the federating States of the Indian Union are not destined to
remain financially weak despite a situation where the Union undoubtedly
has the upper hand by an allocation of the more lucrative subjects of
taxation under the Seventh Schedule. Constitutionality of the Gujarat
B
Act, in the above light, must be answered in favour of the State.
28. Coming specifically to the expression "building" appearing in
Entry 49 List II of the Seventh Schedule in view of the settled principles
that would be applicable to find out the true and correct meaning of the
said expression it will be difficultto confine the meaning of the expression
"building" to a residential building as commonly understood or a structure c
raised for the purpose of habitation. In Government ofAnd/tr" Pr(ldeslt
"nd Otlters vs. Hindustlln Mlle/tine Tools Ltd.'-' a tax on a building
housing a factory has been understood to be a tax on building and not on
the factory or its plant and machinery. A general word like 'building'
must be construed to reasonably extend to all ancillary and subsidiary D
matters and the common parlance test adopted by the High Court to
hold the meaning of levy of tax on building and machinery does not
appear to be right keeping in mind the established and accepted principles
of interpretation of a constitutional provision or a Legislative Entry. A
dynamic, rather than a pedantic view has to be preferred if the
constitutional document is to meet the challenges of a fast developing E
world throwing new frontiers of challenge and an ever changing social
order.
29. The regulatory power of the Corporations, Municipalities and
Panchyats in the matter of installation, location and operation of 'Mobile
Towers' even before the specific incorporation of Mobile Towers in the F
Gujarat Act by the 2011 Amendment and such control under the Bombay
Act at all points of time would also be a valuable input to accord a
reasonable extension of such power and control by understanding the
power of taxation on' Mobile Towers' to be vested in the State Legislature
under Entry 49 of List II of the Seventh Schedule. G
30. The measure of the levy, though may not be determinative of
the nature of the tax, cannot also be altogether ignored in the light of the
views expressed by this Court in Goodricke (supra). Under both the
Acts read with the relevant Rules, tax on Mobile Towers is levied on the
" AIR 1975SC2037=(1975)2SCC274 H
192 SUPREME COURT REPORTS f20161 11 S.C.R.
A 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 plan(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 145Aofthe Gujarat Act)
B
merely indicates that it is the occupier and not the owner of the land and
building who is liable to pay the tax. 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 under Entry 49 List II of the Seventh Schedule.
31. Viewed in the light of the above discussion, ifthe definition of
c "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 l'nd 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
D trace its source to the provisions Entry 49 List II of the Seventh Schedule
to the Constitution.
32. Though several other decisions of this Court and also of
different High Courts have been placed before us we do not consider it
necessary to refer to or to enter into any discussion of the propositions
E laid down in the said decisions as the views expressed in all the aforesaid
cases pertain to the meaning of the expressions 'land' and 'building' as
appearing in the definition clause of the statutes in question.
33. We, therefore, set aside the judgment passed by the Gujarat
High Court and answer the appeals arising from the order of the Bombay
F High Court; transferred cases and the writ petitions accordingly.
However, we leave it open, so far as the cellular operators in the Bombay
cases are concerned, to agitate the issue with regard to the retrospective
operation of the assessment/demand of tax and the quantum thereof
before the appropriate forum, if so advised. Consequently, and in the
light of the above all the appeals, writ petitions and the transferred cases
G are di~posed of.
Nidhi Jain Matters disposed of
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