Court upholds property tax on land use for telecom cables, occupier liable, procedural objections dismissed

The Court dismissed both Writ Petitions, upholding the Municipal Corporation's right to levy property tax on the use of land for laying underground cables by telecommunication service providers. The judgment emphasized that the liability to pay property tax lies with the occupier of the land, not necessarily the owner, based on legal provisions and precedents, despite the petitioner's arguments to the contrary. The Court found no merit in the procedural objections raised by the petitioner and affirmed the Corporation's authority to impose property tax in accordance with the Municipal Corporation Act.

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Issues:
1. Whether a cellular service provider is liable to pay property tax for underground cables laid for providing telecommunication services.
2. Validity of demand notices issued by Municipal Corporations in two separate cases.

Analysis:

1. The petitioner, a cellular service provider, contested the liability to pay property tax for underground cables laid for telecommunication services. The petitioner argued that as a licensee under the Indian Telegraph Act, it was not subject to property tax by the local authorities. The Central Government notification conferred powers on the petitioner similar to those of a telegraph authority. The petitioner emphasized that the Municipal Corporation Act did not empower the Corporation to levy property tax on underground cables laid by a licensee under the Indian Telegraph Act.

2. The Corporation, on the other hand, relied on the definition of "land" under the Municipal Corporation Act to argue that the petitioner, as the owner of the cables, was liable for property tax. Referring to a Supreme Court precedent, the Corporation contended that the actual occupier of the land, in this case, the cable owner, is primarily responsible for property tax payment. The Corporation had passed a resolution for self-assessment of property tax, inviting objections and finalizing rates, following a prescribed procedure under the Act.

3. The main contention of the petitioner was that being a non-owner of the land where the cables were laid, property tax demand was unjustified. However, the Supreme Court precedent in a similar case involving mobile towers established that the liability to pay property tax lies with the occupier of the land, not necessarily the owner. The Court highlighted that the tax was on the use of land for laying cables, not the cables themselves, as argued by the petitioner.

4. The petitioner also raised procedural objections, alleging non-compliance with Section 133 of the Act for imposing the tax. However, the Court clarified that Section 133 pertains to new tax imposition, whereas the property tax in question fell under Section 132, rendering the procedural argument invalid. The Municipal Corporations had passed resolutions and conducted assessments in accordance with the Act before issuing demand notices.

5. Ultimately, the Court dismissed both Writ Petitions, finding no merit in the petitioner's arguments. The judgment upheld the Corporation's right to levy property tax on the use of land for laying underground cables by telecommunication service providers, in line with legal provisions and precedents.

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