The Patna High Court dismissed an application filed for quashing the notification containing the Bihar Mobile Tower, Optical Fibre Cables and related Telecom Infrastructure Rules, 2020 on the ground of being in contravention of the Bihar Municipal Act, 2007 and for other reliefs.
The case of the petitioner is that Chapter XV of the Bihar Municipal Act, 2007 deals with municipal revenues and the taxes which can be levied by the Municipal bodies to generate such revenue. Section 127(1) of the Act provides that the municipality shall have the power to levy taxes mentioned therein which include the taxes on communication towers and related structures/Discantennas.
It was submitted by counsel for the petitioner that the Bihar Mobile Tower Optical Fibre Cables (OFC) and related Telecom Infrastructure Rules, 2020 came to be framed in exercise of powers vested under section 127(1) and section 419(1) of the Act. The same was to facilitate levying of tax on communication towers and related structures in order to generate municipal revenue. Pursuant to the powers conferred under the Act and the Rules made thereunder, in the general meeting of the Patna Municipal Corporation held on 30.11.2019, a proposal was floated to revise the rates of taxes being levied on the communication towers installed in the State. The Municipal Commissioner, Patna Municipal Corporation came out with a letter no.00185 dated 3.1.2020 containing the rates of revised taxes approved by the 38th general meeting of the Empowered Standing Committee.
It is submitted that, however, when the Rules of 2020 were notified, it did not contain the provisions with respect to the rates of taxes as revised by the Corporation. Thus, it is submitted that the Municipal Corporation being the body authorized under the Act under section 127(1) and 419(1), the unilateral amendment of the regulations passed by the Empowered Standing Committee of the Corporation and making the Urban Development and Housing Department as the Nodal Department, were in clear contravention of the provisions of the Act of 2007 and thus, the Rules of 2020 be quashed.
The application was opposed by the counsel for the State of Bihar who submitted that the Rules of 2020 have been lawfully made in exercise of powers vested under section 127(1) and 419(1) of the Act of 2007. There is no violation of any provisions of the Act of 2007 nor any provisions of the Constitution of India. There is no merit in the application and as such, the same be dismissed.
Having heard counsel for the parties and having perused the material on record, the Division Bench of Chief Justice K. Vinod Chandran and Justice Partha Sarthy noted that section 127 of the Act of 2020 deals with the power of the municipality to levy taxes for the purposes of the Act as mentioned therein including on communication towers and related tructures/Discantennas.
The relevant sub-section (1), (2) and (9) of section 127 of the Act are quoted herein below for ready reference: “127. Power to levy taxes.- (1) Subject to the provisions of section 10, the Municipality shall have, for the purposes of this Act, the power to levy the following taxes:-
(a) property tax on lands and buildings including vacant land.
(b) surcharge on transfer of lands and buildings,
(c) tax on deficit in parking spaces in any nonresidential building,
(d) water tax,
(e) fire tax,
(f) tax on advertisements, other than advertisements published in newspapers,
(g) surcharge on entertainment tax,
(h) surcharge on electricity consumption within the municipal area,
(i) tax on congregations,
(j) tax on pilgrims and tourists, and
(k) toll –
(i) on roads, bridges, ferries and navigable channel and
(ii) on heavy trucks which shall be heavy goods vehicles, and buses, which shall be heavy passenger motor vehicles, within the meaning of the Motor Vehicles Act, 1988, plying on a public street or as may be provided for under orders by the State Government.
(l) Communication towers and related structures/Discantennas.
(2) Subject to the prior approval of the State Government, the Municipality may, for raising revenue for discharging its duties, and performing its functions, under this Act, levy any other tax which the State Legislature has the power to levy under the Constitution of India.
(9) The Municipality may revise the rate of Tax on Annual Rental Value with the prior approval of the State Government.”
Section 419 of the Act gives power to the State Government to make rules for carrying out the purposes of the Act. In exercise of powers vested under section 127(1) and 419(1) of the Act of 2007, the State Government framed the Rules of 2020, prayer for quashing of which has been made by the petitioner in the instant application on account of the same being in violation of section 127(1)(l) of the Act.
It was contended by the counsel for the petitioner that the rates of taxes having been revised by the Corporation and the same having been approved in the 38th general meeting of the Empowered Standing Committee of the Corporation, the same did not find mention in the Rules of 2020 framed by the State Government and as the Municipal Corporation was the body authorized under the Act to levy the taxes on communication towers and related structures, the Rules of 2020 were unsustainable and fit to be quashed.
On perusal of the provisions of the Act of 2007, the Court noted that section 419 gives powers to the State Government to make rules for carrying out the purposes of the Act. Though section 127(1)(l) gives power to the municipality to levy taxes for various purposes including on communication towers and related structures, however, the said power is subject to prior approval of the State Government which would be evident from conjoint reading of sub-section (1), (2) and (9) of section 127.
The Court opined that there has been no violation of either the provisions of the Act or of the Constitution in framing of the Rules of 2020 which is under challenge in the application. The Court finds no merit in the contentions raised by the petitioner.
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