Friday, April 26, 2013

No property tax on mobile towers: HC

AHMEDABAD: In a set back for the state government, Gujarat high court on Thursday ruled that it cannot levy property tax on mobile towers and struck down the amendment made in the local laws.

Granting petitions filed by telecom companies, the HC quashed section 145 of Gujarat Local Authorities Laws (amendment) Act, 2011. And this would mandate the state government and the civic bodies to refund the tax, and the amount may run in crore of rupees.

The bench of Justice Akil Kureshi and Justice Sonia Gokani upheld the arguments put forth by the telecom companies, said their counsel Shalin Mehta. They contended that the mobile towers are nothing but telegraph and falls in plant and machinery category. They are certainly not buildings, and therefore the state legislature cannot levy property tax on them. The government has got a right to impose property tax on land and buildings only.

It was also contended that the state government cannot legislate in this regard and only Parliament has got the power to make legislation and amendments in the telegraph act. The amendments made in the law are in contradiction with the provisions made in the Constitution. Hence the court struck down the amendments made in legislation for imposing tax on mobile towers.

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