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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL  NOS.5360-5363 OF 2013

AHMEDABAD MUNICIPAL CORPORATION        APPELLANT(s)

VERSUS

GTL INFRASTRUCTURE LTD. & ORS. ETC.     RESPONDENT(s)

WITH

C.A. No. 5364/2013, C.A. No. 5365/2013, C.A. Nos. 6385-6387/2013,  C.A.  Nos.  6737-6738/2013,  C.A. No.  6739/2013,  C.A.  Nos.  6836-6926/2013,  C.A. Nos. 7865-7894/2013, C.A. No. 8114/2013, C.A. No. 8115/2013,  C.A.  No.  8116/2013,  C.A.  No. 8117/2013,              C.A. No.12209/2016 @ SLP(C) No.  362/2014,   C.A.  Nos.  2854-2855/2014,   C.A. No.12211/2016  (arising  out  of   SLP(C)  No. 12567/2014),     C.A. No.12212/2016 (arising out of SLP(C)  No.  21521/2014),  C.A.  No.12213/2016 (arising out of   SLP(C) No. 22653/2014),  C.A. Nos. 12214-12215/2016  (arising  out  of   SLP(C)  Nos. 29803-29804/2014),  C.A.  No.  12216/2016  (arising out  of   SLP(C)  No.  29765/2014),  C.A.  No. 12217/2016 (arising out of  SLP(C) No. 31442/2014), C.A.  No.12218/2016  (arising  out  of    SLP(C)  No. 31986/2014),   C.A. No.12220/2016 (arising out of

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SLP(C)  No.  24053/2014),  C.A.  No.12219/2016 (arising  out  of    SLP(C)  No.  3550/2015),   C.A. No.12221/2016  (arising  out  of   SLP(C)  No. 6149/2015),     C.A. No. 12222/2016 (arising out of SLP(C) No. 8705/2015), C.A. No.12223/2016 (arising out of   SLP(C) No. 9004/2015), C.A. No.12224/2016 (arising  out  of   SLP(C)  No.  9104/2015),      C.A. No.12225/2016  (arising  out  of  SLP(C) No.37142/2016  arising  out  of  SLP.(C)...CC  No. 4938/2015),                C.A. No.12226/2016 (arising out of  SLP(C) No.9233/2015), C.A. No.12227/2016 (arising  out  of  SLP(C)  No.8698/2015),        C.A. No.12228/2016  (arising  out  of  SLP(C) No.9620/2015),       C.A. No. 12229/2016 (arising out  of  SLP(C)  No.10288/2015),      C.A.  No. 12230/2016 (arising out of SLP(C) No. 9827/2015), C.A.  No.12231/2016  (arising  out  of  SLP(C)  No. 9994/2015),      C.A. No.12232/2016 (arising out of SLP(C) No.11479/2015),        C.A. No.12233/2016 (arising  out  of  SLP(C)  No.  15175/2015),  C.A. No.12234/2016  (arising  out  of  SLP(C)  No. 28473/2015),        C.A. No.12235/2016 (arising out of SLP(C) No. 1457/2016),      C.A. No. 12236/2016 (arising out of SLP(C) No. 12563/2016),    C.A. No. 5348/2015,  W.P.(C)  No.216/2015,  W.P.(C) No.611/2015,  W.P.(C)  No.577/2015,  T.C.(C) No.108/2015,  T.C.(C)  No.  128/2015,  T.C.(C)  No. 129/2015,  T.C.(C)  No.  130/2015  and  T.C.(C)  No. 131/2015

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J U D G M E N T

RANJAN GOGOI, J.

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  24/25.04.2013  passed  by  the

Gujarat  High  Court  declaring  Section  145A  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,  therefore,  exigible  to  tax

under the Gujarat Act. The State Government and the different

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Municipal Corporations have challenged the first part of the

order 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 similar 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. 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

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Corporations Act, 1949 was applicable to the State of Gujarat

also  until  the  year  2011 when by  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 Court by the cellular operators 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. 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.

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6. The relevant provisions of  the Gujarat Act defining the

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  verandahs,  fixed  platforms,  plinths, doorsteps,  walls  including  compound  walls  and fencing and the like.

xxx xxx xxx xxx xxx

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, 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  permanent structure,  equipment or  instrument erected or installed on land or upon any part of  the building  or  premises  for  providing telecommunication services.”

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7. Section 127(1) of the Gujarat Act, the charging section, is

in the following terms:

“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 141AA.

(b) a tax on vehicles, boats and animals.

(c) a tax on mobile towers:

Provided that xxx  xxx  xxx  xxx  xxx  xxx  xxx

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.

9. Section 141AA deals with the rate at which water tax,

conservancy tax and sewerage tax are to be imposed. Section

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141B of  the Gujarat  Act  provides for  the rate at  which the

general tax is leviable.

10.  Section 145A (inserted by the Gujarat Local Authorities

Laws  (Amendment)  Act,  2011)  provides  for  tax  on  mobile

towers  at  rates  not  exceeding  those  prescribed  by  order  in

writing by the State Government. Such tax which is levied on

mobile  towers  is  to  be  collected  from  persons  engaged  in

providing telecommunication services through service towers.

Section 145A is in the following terms.

“145A Tax on mobile towers.-

(1) A tax at the rates not exceeding those prescribed by order in 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 Section 99, determine the rates at which the tax shall be levied."

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11. By  the  aforesaid  Gujarat  Local  Authorities  Laws

(Amendment) Act, 2011 similar provisions for levy of  tax on

mobile towers have been inserted in the Gujarat Municipalities

Act, 1963 and also the Gujarat Panchayats Act, 1993.  

12. The short contention of the cellular operators advanced

before  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 Entry 49 of List II of

the  Seventh  Schedule  to  the  Constitution  which  is  in  the

following terms.

“49.  Taxes on lands and buildings.”

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.

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14. Two significant aspects connected to the issues arising

may  be  taken  note  of  at  the  outset.  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  Legislative  Entry.  In  the  present

case, though the Gujarat Act defines the expressions “land”

and “building”, as rightly held by the High Court, 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; 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 validity of the statute on the

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touchstone  of  it  being  within  the  Legislative  Entry,  by  a

reference to the definition contained in the statute.

15. The second aspect, mentioned above, is one concerning

the 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 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 aforesaid expressions

“land  and  building”  in  Entry  49  of  List  II.  The  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  of  a  Constitutional

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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 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  of  the

Constitution, particularly the Legislative Entry,

a broad, liberal and expansive interpretation is

to be preferred as the meaning of an Entry is

always inclusive. [Synthetics and Chemicals Ltd. vs. State of Uttar Pradesh1]

(ii) Principles of interpretation of a statute are not

foreign  and  altogether  irrelevant  for  the

purposes  of  interpreting  a  constitutional

1  (1990) 1 SCC 109 Para 67

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provision  and/or  a  specific  Legislative  Entry.

[Good Year India Ltd.  vs. State of Haryana & Anr.2]

(iii) A  Constitution  is  an  organic  document  that

must grow and live with the times. [State of West Bengal  vs.  Kesoram Industries Ltd.3]  

(iv) The  spirit  of  the  Constitution,  the

constitutional  goals;  and  the  constitutional

philosophy  must  guide  the  broad  and  liberal

interpretation of a Legislative Entry. [State of West Bengal  vs.  Kesoram Industries Ltd.4]  

(v) The  dictionary  meaning  and  the  common

parlance  test  can  also  be  adopted.  [Trutuf Safety Glass Industries  vs.  Commissioner of Sales Tax, U.P.5]

(vi) Words  and  expressions  in  a  constitutional

provision  or  Legislative  Entry  should  not  be

given  an  unnatural  meaning.  [India  Cement vs. State of Tamil Nadu6]

2 AIR 1990 SC 781 Para 17 3 (2004) 10 SCC 201 Para 50 4 (2004) 10 SCC 201 Para 31 5 (2007) 7 SCC 242 Para 13 6 (1990) 1 SCC 12 Para 18

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(vii) If  a  general  word  is  used  in  a  constitutional

Entry,  it  must  be  construed  as  to  extend all

ancillary  and  subsidiary  matters  that  can  be

reasonably  included.  [Jagannath  Baksh Singh  vs.  State  of  U.P.7;  Elel  Hotels  & Investments Ltd.  & Ors.  vs. U.O.I.8.]

The  abovesaid  principles  which  are  firmly  entrenched  as

principles  of  Constitutional  interpretation must  be  borne in

mind while proceeding further in the case.

17. In  re.  The  Bill  to  amend  Section  20  of  the  Sea

Customs Act, 1878 and Section 3 of the Central Excise

and Salt Act, 19449 , a Bench of nine Judges of this Court

has observed that,

“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  Constitution  relates  to  Finances.   At  the  very

7AIR 1962 SC 1563 Para 10 8 (1989) 3 SCC 698 Para 14 9 1964 (3) SCR 787

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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  thereof relating to legislative relations and distribution of legislative powers with special reference to Article 246.”  

18. Article 246 is in the following terms:

(1) Notwithstanding anything in clauses (2) and (3), Parliament 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  (1),  the Legislature of any State also, have 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”).

(3) Subject to clauses (1) 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”).

(4) Parliament has power to make laws with respect to any matter for any part of the territory of India

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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 such supremacy, if any, 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 must be

ironed out by the Courts and only on a failure to do so the

provisions of Article 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

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Constitution which again is subject to a proviso which may

indicate some amount of Parliamentary supremacy.  

20. 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 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 therefrom forms the basis of the rates of

the  levy  of  tax  is  one  such  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 the cellular operators are

right in contending that mobile towers are covered by the field

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“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.  

21. The  Constitutional  scheme  with  respect  to  financial

relations 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 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

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that 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 of revenue heads/taxation

power in the States certainly shows a disequilibrium which,

however,  is  sought  to  be  balanced  by  the  constitutional

scheme  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 50 of the decision in

State of West Bengal vs. Kesoram Industries Ltd., (supra)

has to be kept in mind as the discussions unfold.

22. We may now see what a Mobile Tower is and consists of.

In technical terms a Mobile Tower is called a “Base Transceiver

Station.”  It involves the making of structure consisting of the

following:

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a. A pre-fabricated shelter made of insulating PUF material made of fibres.

b. Electronic Panel.

c. Base  Transceiver  Station  (BTS)  and  other radio  transmission  and  reception equipment.

d. A diesel generator set.

e. Six poles of 6 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.

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

take  notice  of  the  meanings  of  the  two  expressions  as

appearing in the leading judicial and English dictionaries.  A

comprehensive  list  of  the  different  meanings  expressed  in

different  works  so  far  as  the  two  expressions  ‘land’  and

‘building’ are concerned are set out below.

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LAND

Stroud’s  Judicial  Dictionary (Fifth  Edition)  defines  that ‘land’, or ‘lands’, not only means the surface of the ground, but also everything (except gold or silver mines) on or over or under it, for Cujus est solum ejus est usque ad coelum et ad inferos (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’  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, 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 a juristic 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 owner of that space may well own those  fixed  contents.  Land  is  immovable,  as  distinct from chattels,  which  are  moveable,  it  is  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 (2nd Edition, 1988).

P.  Ramanatha  Aiyar’s Law  Lexicon (Second  Edition) observes  that  the  word  ‘land’  is  a  comprehensive  term, including  standing  trees,  buildings,  fences,  stones,  and

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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 therefore embraces growing trees. 48 All 498 95 IC 150 = 24 ALJ 583 = 1926 All 689.

BUILDING

Stroud’s Judicial Dictionary (Fifth Edition) observes that what is a ‘building’ must always be a question of degree and 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.B. 264). The ordinary and natural meaning of the word ‘building’ includes the fabric and the ground  on  which  it  stands  (Victoria  City  v.  Bishop  of Vancouver Island [1921] A.C. 384, at p. 390).

Black’s  Law  Dictionary (Fifth  Edition)  observes  that ‘building’  is  a  structure  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.

P.  Ramanatha  Aiyar’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 within those walls. (per D.G. Gouse & Co.  v.  State of  Kerala,  AIR 1980 SC 271 [Kerala Building Tax Act (1975) S. 2(3)])

DICTIONARY MEANING OF LAND AND BUILDING

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‘Building’  is  something  with  a  roof  and walls,  such as a house  or  factory.  (Collins  Dictionary  of  the  English Language, First Edition, 1979)

‘Land’ refers to the solid part of the surface of the earth, as distinct  from seas,  lakes,  etc.  (Collins  Dictionary  of  the English Language, First Edition, 1979)

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 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.

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25. We may now see how judicial opinion has dealt with the

question.  

In  Anant  Mills  Co.  Ltd.  Vs.  State  of  Gujarat  and

Others10 this Court had occasion to consider the scope and

ambit of  the provisions 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 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  to  the  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 129 makes provision for the levy of property tax on  buildings  and  lands.  Section  139  merely  specifies  the persons who would be primarily responsible for the payment of that tax. The word “land” includes not only the face of the

10 (1975) 2 SCC 175

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earth, but everything under or over it, and has in its legal signification  an  indefinite  extent  upward  and  downward, giving rise to the maxim, Cujus est solum ejus est usque ad coelum (see p. 163, 73 Corpus Juris Secondum). According to Broom’s Legal Maxims, 10th 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 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  nomen generalissimum, includes, not only the face of the earth, but everything under it or over it.”

26. In Goodricke Group Ltd. and Others  vs. State of W.B.

and Others11 cess imposed on green tea (leaves)  by weight

was held to be a tax on land and not on the produce.  In an

earlier decision in Ajoy Kumar Mukherjee  vs.  Local Board

of  Barpeta12  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 days when

the market was held.  This Court, in Ajoy Kumar Mukherjee

(supra) 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 of land

11 (1995) 1 Supp SCC 707 12 AIR1965 SC 1561

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which can certainly be taken into account in imposing a tax for the purpose of this 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 of S. 62 of the Act, which imposes the tax under challenge.”  

27. In   Municipal Corporation of Greater Bombay13  the

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

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 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

13 AIR 1991 SC 686

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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

principles  of  interpretation  of  the  constitutional  provisions.

Paragraph  18  of  the  report  in  Municipal  Corporation  of

Greater Bombay  (supra) may now be noticed.

18. In S.P. Gupta v. Union of India14 interpreting Section 123 of the Indian Evidence Act, this Court held that the section was 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, suffer adjustments through judicial interpretation so as  to  accord  with  the  requirements  of  the  fast  changing society  which  is  undergoing  rapid  social  and  economic 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  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  fashioned  by  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

14 1981 Supp SCC 87

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here  that  a  judge  is  called  upon  to  perform  a  creative function. He has to inject flesh and blood in the dry skeleton provided  by  the  legislature  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 delivering justice.

The  discussions  that  had  preceded  on  the  financial

relations between the 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.  Constitutionality of the

Gujarat 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

difficult to confine the meaning of the expression “building” to

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a residential building as commonly understood or a structure

raised  for  the  purpose  of  habitation.   In  Government  of

Andhra Pradesh and Others vs. Hindustan Machine Tools

Ltd.15a  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 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 world throwing new frontiers of challenge and an

ever changing social order.   

15 AIR 1975 SC 2037 = (1975) 2 SCC 274  

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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 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.

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 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

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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.

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,  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

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can 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 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 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,

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and in the light of the above all the appeals, writ petitions and

the transferred cases are disposed of.

……………….....................,J. (RANJAN GOGOI)

……………….....................,J. (PRAFULLA C. PANT)

NEW DELHI DECEMBER 16, 2016.