levy of property tax on “mobile towers =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 Municipal Corporations have challenged the first part of the order of the High Court whereas the Cellular operators have challenged the later part.=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. 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, and in the light of the above all the appeals, writ petitions and the transferred cases are disposed of.

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 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
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 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 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.

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.”

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 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.”

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.

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 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 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 Pradesh[1]]

(ii) Principles of interpretation of a statute are not foreign and
altogether irrelevant for the purposes of interpreting a constitutional
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 Nadu[6]]

(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, 1944[9] , 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 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 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 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 “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 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:

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.

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 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

‘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.

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

In Anant Mills Co. Ltd. Vs. State of Gujarat and Others[10] 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 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 Others[11]
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 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 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 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 Bombay[13] 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 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 India[14] 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 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 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.[15]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 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.

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 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 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, 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.

———————–
[1] (1990) 1 SCC 109 Para 67

[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
[7] AIR 1962 SC 1563 Para 10
[8] (1989) 3 SCC 698 Para 14
[9] 1964 (3) SCR 787
[10] (1975) 2 SCC 175
[11] (1995) 1 Supp SCC 707
[12] AIR1965 SC 1561
[13] AIR 1991 SC 686
[14] 1981 Supp SCC 87
[15] AIR 1975 SC 2037 = (1975) 2 SCC 274

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