High Court of KeralaSingle Judge2019-12-03Writ petition dismissed; right to appeal left o...

Bharath Sanchar Nigam Limited, Kottayam v. The Secretary and Another

Case / Petition Number:WP(C).No.7856 OF 2011(F)

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Anu Sivaraman
Judgment Date: 2019-12-03
Court Decision / Holding: Writ petition dismissed; relied on earlier decisions confirming BSNL’s transfer of assets and corporate personality, thereby disallowing exemption under Article 285. However, the petitioner’s right to move the appellate authority against the municipality’s demand is left open, with the period spent before this Court to be excluded if an appeal is filed.
Final Disposition: Writ petition dismissed; right to appeal left open; period to be excluded if appeal filed.

Parties to the Case

Appellants / Petitioners

Bharath Sanchar Nigam Limited, Kottayam (represented by Deputy General Manager, K.A. Jose)

Respondents

The Secretary and Another
The Secretary, Local Self Government Department, Secretariat, Thiruvananthapuram

Legal Representation & Advocates

Counsels for Petitioners

• Smt. S.K. Devi

Counsels for Respondents

• Assistant Solicitor General (Sri P. Parameswaran Nair) for Union of India
• Sri B. Premnath E
• Sri Philip J. Vettickattu
• Sri Siby Mathew
• Sri Siby Chenappady (SC), Kottayam Municipality

Case Synopsis & Summary

This writ petition challenges property tax demands raised by Thrissur Municipality on premises used by Bharath Sanchar Nigam Limited (BSNL) at Thrissur, arguing that the properties belong to the Union of India’s Department of Telecommunications and should be exempt from tax under Article 285 of the Constitution. The petition relies on earlier decisions in this Court, including W.P.(C).No.10972/07 and the related writ appeal in WA No.2620/17, which examined whether BSNL’s transferred assets were exempt from municipal taxation. The Court notes that BSNL is a company incorporated under the Companies Act with a separate corporate personality, created when the Telecommunication Department’s functions were taken over by BSNL on 01.10.2000. Citing Electronics Corporation of India Ltd. v. Secretary, Revenue Department, Govt. of A.P. (1999) 4 SCC 458; Western Coalfields Ltd. v. Special Area Development Authority (1982) 1 SCC 125; and Food Corporation of India v. Municipal Committee, Jalalabad (1999) 6 SCC 74, the bench holds that the transferred assets, though possibly not yet formally conveyed, stood transferred on the appointed date and thus cannot be treated as Union properties for exemption purposes. The petition is dismissed following the Division Bench’s decision, though the petitioner’s right to approach the appellate authority remains open, with time spent in litigation to be excluded if an appeal is filed.

Provisions of Law Cited

Article 285 of the Constitution of IndiaMunicipalities ActThe Companies Act

Legal Doctrines & Maxims

Corporate personality doctrine
Ongoing concern premise (transfer of assets)

Submissions & Arguments

Contentions of Appellants / Petitioners

BSNL contends that its properties are not liable to taxation under the Municipalities Act because the assets are owned by the Union of India’s Department of Telecommunications and should be exempt under Article 285. It relies on prior judgments acknowledging that BSNL’s transfer of assets in 2000 created a separately identifiable corporate entity, and that mere absence of formal conveyance cannot absolve it from obligations or grant exemptions. The petitioner seeks quashing Exts. P1–P3 and P5 and asserts that the conveyance and mutation issues render the properties Union properties, exempt from tax.

Contentions of Respondents

The respondents argue that BSNL is a distinct corporate entity and that the assets were transferred to BSNL on 01.10.2000, with the Government’s telecom properties no longer forming part of Union of India. They rely on established precedents affirming corporate personality and transfer of assets as an ongoing concern, rejecting the claim of tax exemption under Article 285. They maintain that the local authority’s demands are legitimate, and the matter falls within the jurisdiction of tax assessment post-transfer.

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
Electronics Corporation of India Ltd. v. Secretary, Revenue Department, Govt. of A.P.	1999(4) SCC 458	Positive	relied upon to establish that BSNL is a distinct entity with corporate personality and cannot claim Union properties exemption.
Western Coalfields Ltd. v. Special Area Development Authority	1982(1) SCC 125	Positive	cited to support the corporate personality transfer principle from the old department to BSNL.
Food Corporation of India v. Municipal Committee, Jalalabad	1999(6) SCC 74	Positive	cited as part of the line of authority on transfer and exemptions related to municipal taxation.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** **TUESDAY, THE 03RD DAY OF DECEMBER 2019 / 12TH AGRAHAYANA, 1941** ## **WP(C).No.7856 OF 2011(F)** ## **PETITIONER/S:** **BHARATH SANCHAR NIGAM LIMITED KOTTAYAM, REPRESENTED BY ITS, DEPUTY GENERAL MANAGER, K.A.JOSE.** **BY ADV. SMT.S.K.DEVI** ## **RESPONDENT/S:** **1 THE SECRETARY AND ANOTHER P.B.NO.200, KOTTAYAM-686 001. 2 THE SECRETARY LOCAL SELF GOVT. DEPARTMENT, SECRETARIAT,, THIRUVANANTHAPURAM-695 001. R1 BY ASSISTANT SOLICITOR GENERAL R1 BY ADV. SRI.P.PARAMESWARAN NAIRASG OF INDIA R1 BY ADV. SRI.B.PREMNATH E R1 BY ADV. SRI.PHILIP J.VETTICKATTU R1 BY ADV. SRI.SIBY MATHEW R1 BY SRI.SIBY CHENAPPADY, SC, KOTTAYAM MUNICIPALITY** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03.12.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).No.7856 OF 2011(F)** 2 ## **JUDGMENT** ## **Dated this the 3rd day of December 2019** This writ petition is filed seeking the following prayers: “(i) to issue a writ of certiorari to quash Ext.P1, P2,P3 and P5 notices issued by the 1[st] respondent. (ii) to declare that the property belonging to Union of India, will not come under the purview of the Local Act until and unless conveyed to in the name of BSNL.” 2. Heard the learned counsel for the petitioner and the learned counsel for the respondents. 3. It is submitted by the learned counsel on either side that an identical issue in respect of a very same company has been considered by this Court. The judgment of the learned Single Judge of this Court in W.P.(C).No.10972/07 as well as the judgment of the Division Bench in a writ appeal arising from the same, that is, judgment dated 13.04.2018 in W.A.No.2620/17 as also an order in R.P.No.411/18 in W.A.No.2620/17 have been placed for consideration. 4. In W.P.(C).No.10972/07, what was under challenge was the demand made by the Thrissur Corporation for property tax in respect of the Telephone Exchange at **WP(C).No.7856 OF 2011(F)** 3 Thrissur. The demand of property tax was in respect of the period from 2000-2001 to 2006-2007. The company had raised specific claim that the buildings belong to the Department of Telecommunication, Government of India and that as such, they are exempt from taxation under Article 285 of the Constitution of India. 5. The writ petition had been admitted on the said ground and an interim stay was granted. However, while considering the writ petition, the learned Single Judge found that BSNL was a Company incorporated under the Companies Act and though it is owned by the Central Government, it is a separate entity and properties belonging to the BSNL cannot be held to be properties belonging to the Union of India, so as to claim the benefit of Article 285 of the Constitution. 6. It was found that the BSNL had taken over the business of providing Telecom Services and Network Management from the erstwhile Central Government Departments of Telecom Services and Telecom Operations as an ongoing concern with effect from 01.10.2000. Relying on a judgment of the Constitution Bench of the Apex Court in **WP(C).No.7856 OF 2011(F)** 4 **Electronics Corporation of India Ltd. v. Secretary, Revenue Department, Govt. of A.P. [1999(4) SCC 458]** and earlier judgments in **Western Coalfields Ltd. v. Special Area Development Authority [1982(1) SCC 125]** and the **Food Corporation of India v. Municipal Committee, Jalalabad (1999(6) SCC 74),** this Court held that the BSNL which is a distinct and separate entity with a corporate personality cannot claim that properties owned by it are properties of the Union of India and are therefore, exempt from property tax imposed under the Municipalities Act. 7. In writ appeal, a specific contention was raised to the effect that the transfer of the properties was not complete and that as such, the properties which were still remaining in the name of the Telecom Department of the Union of India were liable to be treated as properties of the Union. The Division Bench proceeded to consider this aspect of the matter with specific reference to the materials available on record. It was found that the assets and liabilities of the Telecommunication Department of the Government of India had been taken over by BSNL and were transferred to the **WP(C).No.7856 OF 2011(F)** 5 Company with effect from 01.10.2000, after fixing provisional value for the same. The Division Bench therefore, held that the properties stood transferred to the Company and what remained was formal conveyance. It was held that the mere fact that formal conveyance had not been effected and would not absolve the BSNL from liability to pay tax to the local authorities, in view of the fact that the properties stood transferred on the appointed date. Though a review petition was filed, the same also came to be dismissed by order dated 05.06.2018, on the specific finding that there was no error apparent in the judgment, which required a review. The right of the petitioner to move the Appellate Authority in terms of the Municipalities Act was left open. 8. The learned Senior Counsel appearing for the petitioner would contend that the properties in question still remain in the name of the Department of Telecommunications, Government of India and that the conveyances had not been effected at the time when the demands challenged in this writ petition had been raised. It is submitted that mutation of the properties have also not **WP(C).No.7856 OF 2011(F)** 6 been effected and that as such, the properties are liable to be treated as properties of the Union and the local Authority could not have raised a demand for property tax in respect of the same 9. Having considered the contentions advanced, I am of the opinion that the question raised stands covered by the decision of the learned Single Judge as well as the Division Bench. This Court had given anxious consideration to the specific contention raised by the petitioner that the properties remained in the name of the Department of Telecommunication. It has been found that the properties of the Department of Telecommunication stood transferred to the BSNL with effect from 01.10.2000 and that the contention that the formal conveyances had not been effected, would not absolve the Company of the liability. In the above view of the matter, I am of the opinion that the contentions raised in this writ petition do not justify the grant of prayers sought for. The writ petition is accordingly dismissed, following the decision of the Division Bench in the writ appeal as affirmed in the order in the revision petition **WP(C).No.7856 OF 2011(F)** 7 dated 05.06.2018. However, the right of the petitioner to move the appellate authority as against the demand raised by the municipality is left open. In case an appeal is being preferred, in view of the fact that this writ petition was pending before this Court, the period spent before this Court shall be excluded. **Sd/-** Dxy **ANU SIVARAMAN JUDGE** **WP(C).No.7856 OF 2011(F)** 8 ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS** EXHIBIT P1 : TRUE COPY DEMAND NOTICE NO.4191 DATED 01.11.2011. EXHIBIT P2 : TRUE COPY DEMAND NOTICE NO.4192 DATED 01.11.2011. EXHIBIT P3 : TRUE COPY DEMAND NOTICE NO.4193 DATED 01.11.2011. EXHIBIT P4 : TRUE COPY OF LETTER EXCLUDING THE ENCLOSURE NO.B 706/2010-11/27 DATED 29.12.2010. EXHIBIT P4A : TRUE COPY OF LETTER NO.28321/L2/06 LGSD DATED 17.08.2006. EXHIBIT P5 : TRUE COPY OF NOTICE DATED 28.01.2011.