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2015 (12) TMI 845 - SUPREME COURT

2015 (12) TMI 845 - SUPREME COURT - TMI - Levy of property tax - warehouse - property tax on the value of storage and water tanks of the IOC situated in the industrial development area of Cuddapah (A.P.) - Held that:- It cannot be disputed that structures in question are building. The term 'building' as defined in Black's Law Dictionary, 10th Edition mentioned it to be a structure with walls and a roof, esp. a permanent structure. Even Mr. Guru Krishnakumar, learned senior counsel for the IOC ac .....

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o 'warehouse', it is clear that a place where goods are stored would be 'warehouse' which is specifically mentioned in the definition of house contained in Section 2(19) of the Act. It would, thus, follow that it may not be necessary that such a place is capable of frequent visits by the human beings or fit for human occupations. The High Court has rightly pointed out that as per the said definition, the requirement that a house should be fit for human occupations is only for huts which is defin .....

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ation Limited (hereinafter referred to as the 'IOC') has challenged the common judgment rendered by the High Court of Judicature, Andhra Pradesh at Hyderabad in the two writ petitions which were filed by the IOC impugning the order dated 14.12.2002 coupled with demand notice dated 10.07.2002 and order dated 14.10.2002 coupled with demand notice dated 12.06.2003 respectively. By the aforesaid orders, respondent No.1, which is Andhra Pradesh Industrial Infrastructure Corporation Limited, h .....

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ng two writ petitions was that the demand notices calling upon the IOC to pay the property tax related to four different years. Assessment Years 2000-01, 2001-02 and 2002-03 were covered by the demand notice dated 10.07.2002 and demand notice dated 12.06.2003 pertained to Assessment Year 2002-03. This was the reason for the High Court to dispose of the two writ petitions by the common decision. The High Court has, by reason of the said judgment, dismissed the writ petitions of the IOC holding th .....

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ter tanks could be termed as 'building' within the meaning of Section 2(3) of the Act and be covered by the definition of 'house' contained in Section 2(19) of the Act as the tax is payable on the 'house'. After the High Court had given its judgment, another demand notice dated 03.07.2007 was issued, creating demands of property tax for the Assessment Years upto 2006-07 and challenging the said demand notice on the same grounds, IOC has also filed Writ Petition (C) No. 49 .....

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g products including petrol, high speed diesel, liquified petroleum gas, lubricants etc. For the purpose of efficient distribution of its products, the IOC has storage depots and LPG bottling plants at various places. One such LPG bottling plant of the IOC is situated in the industrial development area, Cuddapah. This bottling plant is spread over a large extent of land and consists of various building, machinery and LPG storage tanks. The entire bottling plant falls within in the jurisdiction o .....

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orm part of any 'building'. The aforesaid entire area was handed over to the first respondent which was also vested with all necessary powers conferred on the Gram Panchayat under the Act. Respondent No.1, thus, assumed jurisdiction over the area with power to collect the property tax. On the assumption of such powers, respondent No.1 issued demand notice dated 10.01.1999 to the IOC demanding tax to the tune of ₹ 9,11,380.60 for the Assessment Year 1998-99. However, this demand was .....

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d 'house' as defined under the Act. Vide order dated 08.12.2001, this request of the IOC was rejected by respondent No.3. Thereafter, demands were made for other Assessment Years and representations of IOC against those demands were also rejected. This is how, challenging the said demands, the two writ petitions were filed by the IOC, as already noted earlier. 6. The case of the IOC was that the value of LPG storage tanks which amounts to ₹ 557 lakhs and the value of the water stor .....

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nd Oil Industry safety norms. These structures are pressure vessels, in which no human being can enter or stay. These structures are also operated for long period of time. It is only after a lapse of more than a few years, humans enter the structure for cleaning. Similarly, the water storage tanks are normally filled with water or use in case of emergencies. These tanks also cannot be inhabited by human being during their normal operation. These tanks are also cleaned after a lapse of few years .....

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as follows: Section 2(3) : 'building' includes a house, outhouse, shop, stable, latrine, shed (other than a cattle shed in an agricultural land), hut, wall and any other such structure whether of masonry, bricks, wood, mud, metal or other material whatsoever; Section 2(19) : 'House' means a building or a hut fit for human occupation, whether as a residence or otherwise and includes any shop, factory, workshop or warehouse or any building used for garraging or parking buses or as .....

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gram panchayat may declare to be a hut for the purposes of this Act; Section 60 - Taxes leviable by gram panchayats (1) A gram panchayat shall levy in the village, (a) a House-tax; (b) kolagaram, or katarusum that is to say, tax on the village produce sold in the village by weight measurement or number subject to such rules as may be prescribed; (c) such other tax as the Government may, by notification, direct any gram panchayat or class of gram panchayats to levy subject to such rules as may b .....

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ecific purpose; (iii) a land-cess at the rate of two naya paise in the rupee on the annual rental value of all occupied lands which are not occupied by or adjacent and appurtenant to, buildings; (iv) fees for use of porambokes or communal lands under the control of the gram panchayat; (v) fees for the occupation of building including chavadies and sarais under the control of the gram panchayat. (4) Every gram panchayat may also levy a duty in the form of a surcharge on the seigniorage fees colle .....

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ed by the gram panchayat- (a) in the Andhra Area, on the land cess, leviable under Section 78 of the Andhra Pradesh (Andhra Area) District Boards Act, 1920 and on the education tax leviable under section 37 of the Andhra Pradesh Education Act, 1982; (b) in the Telangana area, on the local cess leviable under section 135 of the Andhra Pradesh (Telangana Area) District Boards Act, 1955 and on the education tax leviable under section 37 of the Andhra Pradesh Education Act, 1982. (6) Any resolution .....

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d: Provided that no house tax shall be levied on poultry sheds and annexes thereto which are essential for running the poultry farms. (2) The house-tax shall, subject to the prior payment of the land revenue, if any due to the Government in respect of the site of the house be a first charge upon the house and upon the movable property, if any, found within or upon the same and belonging to the person liable to pay such tax. (3) The house-tax shall be levied every year and shall, save as otherwis .....

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annual or capital value of houses or the categories into which they fall for the purposes of taxation; (iii) the persons who shall be liable to pay the tax and the giving of notice of transfer of houses; (iv) the grant of exemptions from the tax on the ground of poverty; (v) the grant of vacancy and other remissions; and (vi) the circumstances in which, and the conditions subject to which houses constructed, reconstructed or demolished, or situated in areas included in, or excluded from the vill .....

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in such order direct any gram panchayat to levy the house-tax referred to in clause (a) of sub-section (1) of section 60 at such rates and with effect from such date not being earlier than the first day of the year immediately following that in which the order is published, as may be specified in the order. Such direction may be issued in respect of all buildings in a gram panchayat or in respect of only such buildings belonging to the undertakings owned or controlled by the State Government or .....

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nd the date from which the house-tax shall be levied, had taken effect. (3) A gram panchayat shall not alter the rate at which the house-tax is levied in pursuance of an order under sub-section (1) or abolish such tax except with the previous sanction of the Government. 8. From the aforesaid definition of 'building' contained in Section 2(3) of the Act, it becomes apparent that very expansive meaning is assigned to the expression 'building' which inter alia includes a 'house& .....

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; is only one of the structure qualifies as building, the text in question is to be on 'house' and not on all other kinds of buildings. In this process, it was argued that the structures in question, namely, LPG storage tanks may be 'building' but they are not 'house', as every building is not a house. It was argued that the term 'house' is to take its flavour from the purpose for which 'house' is used, namely, the one which is fit for human occupation as .....

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encies and these tanks also cannot be inhabited by the human beings during their normal operation. These tanks can be cleaned after a lapse of few years only. 9. It is difficult to countenance the aforesaid submissions of the learned senior counsel for the appellant. As was rightly argued by the learned counsel for the respondents, the definition of 'house' is in two parts. First part of this definition refers to building or a hut fit for human occupation, whether as a residence or other .....

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term 'building' as defined in Black's Law Dictionary, 10th Edition mentioned it to be a structure with walls and a roof, esp. a permanent structure. Even Mr. Guru Krishnakumar, learned senior counsel for the IOC accepted that the storage tanks and water tanks would qualify as buildings. 'Storage' is described in the Black's Law Dictionary as 'the act of putting something away for future use; esp., the keeping or placing of articles in a place of safekeeping, such as a .....

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goods are kept in bond. 11. More significant is the manner in which P. Ramnath Aiyar's Advanced Law Lexicon, 4th Edition gives the description of storage and warehouse. It is as follows: Storage and warehousing. Storage and Warehousing includes storage and warehousing services for goods including liquids and gases but does not include any service provided for storage of agricultural produce or any service provided by a cold storage. [Finance Act (32 of 1994), S. 65(1)(87)]. 12. The above de .....

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ediately described as an act of storage . A vehicle can also be used as a storehouse. But, whether in a particular case, a vehicle was used as a store or whether a person had stored his merchandise in a vehicle would be a matter of fact in each case. Carrying goods in a vehicle cannot per se be storing although it may be quite possible that a vehicle is used as a store. Transporting is not storing. Section 3(2)(d) of the Act extracted earlier in the judgment uses the expressions storage and tran .....

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