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Case Reviews, The Law

GTL Infrastructure Ltd vs State Of Gujarat

The petition raises the question of property tax on mobile towers. The case deals with the petitioners first challenge to the validity of the statutory provisions in context of the legislative competence and also that proper rules after following the procedure provided under the respective Acts have not been framed to enable the local authorities to collect tax on the mobile towers. 

By: Hanoon Vahab, 3rd Year, BBA LLB, Geeta Institute of Law.


  • The petitioner is engaged in providing infrastructure for Mobile Telecommunication Services & enjoys necessary license and registration issued by the competent authority under the Indian Telegraph Act, 1885. 
  • For providing such infrastructure to its customers, the petitioner company is required to install mobile towers, which is why, the petitioner enters into agreements with private owners.
  • Armed with such agreements, the petitioner would apply to the local authorities for permission to erect such a structure. 
  • Respondent no. 2 and 3 issued various municipal tax bills to the petitioner demanding property tax on such BTS erected by the petitioner within the limits of such Corporations. 

These bills, the petitioner has challenged on the ground that it is outside the competence of the State Corporation to tax the petitioner s BTS and ultra vires the GPMC Act. 

  • And also by way of an amendment, the petitioner also prayed for a declaration that section 145A of the GPMC Act is ultra vires Articles 14, 243 and 265 of the Constitution.
  • The respondents have appeared and filed replies opposing the petition. Reply of respondent no.1 State Government deals mainly with the validity of the said provision & stated that the State Legislature is competent to enact the laws pertaining to taxes on lands and buildings. 
  • Respondent no. 3 Surat Municipal Corporation also has filed its reply & reliance is placed on section 2(5) of the GPMC Act defining the term building to contend that the definition is wide and includes a variety of structures. 
  • Similarly, respondent no. 2 AMC has also filed its reply and taken similar contentions.


1) Is the Amending Act ultra vires as it provides for a legislation for tax collection on a telegraph which is a subject of Union Legislature and already included in the Union Legislation in the form of Indian Telegraph Act, 1885?

2) Whether, the Amending Act and in particular, Section 145A of the GPMC Act introduced by the Amending Act, is ultra vires the Constitution being beyond the competence of State Legislature?

3) Whether the tax collection mechanism followed by the local authorities stand appropriate?


The Amending Act, 1897

The Indian Telegraph Act, 1885

Article 243X in the Constitution Of India 1949

Section 4 in the Amending Act, 1897

Article 246 in the Constitution of India 1949

Arguments Advanced 


1. It was contended that mobile tower is a telegraph and in accordance with Entry 31 List- I of the Seventh Schedule falls under a Union List & therefore the question of competency on part of State Legislature arises.

2. It was also contented that Section 145 A of the GPMC Act was ultra vires as it provides uncanalised & unguided powers to the delegate to collect taxes; a mobile tower is neither land nor building. Endnotes: Entry 49 of List- II to the Seventh Schedule.

3. In reference to Section 2( 34 AA) of the GPMC Act, definition of mobile tower introduced under Amending Act makes it clear that a mobile tower is nothing but a plant & machinery.


1. It was argued that the authority to tax lands and buildings is exclusively vested in the State Legislature under Entry 49 of List- II & Telegraph Act, 1885 operates in an entirely different filed which has nothing to do with tax collection, in cases of a building.

2. Furthermore, it was contended that as defined in different Acts & in particular, the GPMC Act, mobile towers are buildings and it must be understood in an extended sense and not to confine only to dwelling houses.

3. He further added that with technological advancement and with changing times, the court must interpret provisions of different statues along with every entry in Constitution and in regards to questioning the legislative competency, the doctrine of Pith and Substance should be taken into consideration.


The court didn’t agree to the issues challenged by the Petitioners as to the legislative incompetency of the State Legislature to levy taxes on mobile towers and regarding the default in mechanism used to levy such taxes.

Therefore, the entire petitions stand disposed of accordingly.


Union of India and others v. Shah Goverdhan L. Kabra Teachers College, 2002

In reference to the judgment of this case, it was observed that in case of conflict between entries in List-I and List-II, the same has to be decided by application of the principle of “pith and substance”.

Rajiv Sarin and another v. State of Uttarakhand and others,2011

Referring to the judgment it was held that, in the context of enactments relatable to Schedule Seven List-III of the Constitution, passed by different legislatures, the doctrine of pith and substance can be relied upon and would apply. 

Girnar Traders(3) v. State of Maharashtra and others,2011

In this, serious attempt was made to convince the Court that the doctrine of pith and substance has a very restricted application and it applies only to the cases where the Court is called upon to examine the enactment to be ultra vires on account of legislative incompetence.

Gulabchand Bapalal Modi (supra)

the assessment and levy of the property taxes have to be in conformity with the Act and the rules. Whether such delegation is excessive and amounts to abdication of an essential legislative function has to be considered from the scheme, the objects, and the provisions of the statute in question.

Association of Leasing and Financial Service Companies v. Union of India and others, 2011

In accordance with this judgment, to ascertain legislative competence for collecting tax on mobile towers, the court decided to interpret legislative Entry 49 pertaining to taxes on lands and buildings as contained in the Constitution on the basis of common understanding of term building ignoring the special meaning which may have been given in an expansive definition contained in section 2(5) of the GPMC Act.

Offshore Holdings Private Limited v. Bangalore Development Authority and others

The Constitution Bench of Supreme Court observed that Article 246 is one of the source confirming power to legislate and such entries are to be construed liberally and widely so as to attain the purpose of their enactment.


Plantation Private Limited and another v. State of Karnataka,2011

The Apex Court in para.185 observed that the correct way of construing the statute is to apply the plain meaning of the words.

Municipal Corporation of Greater Bombay and others(supra)

The word, ‘building’ must be given its ordinary natural meaning ascribable to it including the fabric and the ground on which it stands.

Ghanshiam Das v. Debi Prasad and another, 1966

In reference to this, the word “building” has not been defined in the Act and must, therefore, be construed in its ordinary grammatical sense unless there is something in the context or object of the statute to show that it is used in a special sense different from its ordinary grammatical sense.

Bharti Tele-Ventures Limited (supra),

The learned Single Judge of Bombay High Court held that the contention of the petitioners that the tower and/or the cabin set up by the mobile company would not fall within the definition of building or development, cannot be accepted. 

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