HC allows local bodies to tax mobile phone towers

Companies have to pay a sum of Rs 12,000 every year

Partly allowing a batch of writ petitions filed by Hutchinson Essar South Ltd and others, Justice H N Nagmohan Das has held that the private mobile operators have to obtain licence from the local bodies under the relevant enactments for erecting mobile phone towers.

Further, the court has directed the petitioner's companies to pay a sum of Rs 12,000 per year per mobile phone tower as tax to the local bodies.

“The same is subjected to amendment of taxation rules by the local bodies,” the court said.

Provisions of KMC Act

"Once the mobile companies install towers within the limits of local bodies by obtaining permission from them, they fall under the definition of the word 'building'. If a building is constructed within the limits of the local bodies, they can levy and collect taxes as per provisions of enactment and rules. Therefore, it is needless to say that the petitioner company is liable to pay taxes to local bodies as per the provisions of rules", the court observed.

The Bench further pointed out that the BBMP has amended the rules relating to assessment of buildings in the City limits. “Under these rules, the BBMP can levy taxes on mobile towers at Rs 12,000 per year per tower. It can make amendment to the Karnataka Municipal Corporation and Panchayatraj rules. Until then the local bodies are at liberty to adopt the rules framed by the BBMP in the matter of levying taxes on mobile towers."

The petitioners’ company had challenged the demand notice issued by the various urban local bodies in the State demanding the payment of tax towards mobile phone towers.
Challenging the levy, the petitioners had stated that under the Karnataka Municipal Corporation Act and Karnataka Panchayatraj Act, there is no provision to levy the taxes on mobile phone towers.

Submitting that they are installing the towers on private properties after obtaining necessary permission by way of license, the petitioners contended that the provisions of KMC and Panchayataraj Act do not specify the levy and collection of the annual permission fee and installation charges of mobile phone towers.