2015 (12) TMI 845 - SC - Indian Laws

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 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 warehouse or depository. Black s Law Dictionary also gives the description of warehouse as a building used to store goods and other items . When we read the definition of house in the context of meaning that is to be assigned to 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 defined under Section 20 of the Act. The Legislature has provided a particular definition to house and levied property tax thereupon. It is this fictional definition of house which is to be kept in mind for the purpose of levy of tax. No merit in this appeal as well as writ petition which are accordingly dismissed

Summary

Issues Involved:
1. Liability of Indian Oil Corporation (IOC) to pay property tax on storage and water tanks.
2. Interpretation of 'building' and 'house' under the Andhra Pradesh Panchayat Raj Act, 1994.
3. Applicability of property tax to storage tanks under the provisions of the Act.

Issue-wise Detailed Analysis:

1. Liability of Indian Oil Corporation (IOC) to pay property tax on storage and water tanks:

The Indian Oil Corporation Limited (IOC) challenged the common judgment of the High Court of Andhra Pradesh, which upheld the demand for property tax on the value of storage and water tanks situated in the industrial development area of Cuddapah. The property tax was demanded under The Andhra Pradesh Panchayat Raj Act, 1994. The High Court dismissed the writ petitions filed by IOC, holding that property tax is payable under the provisions of the Act. The Supreme Court, in this judgment, also dismissed the appeal and writ petition filed by IOC, affirming the High Court's decision.

2. Interpretation of 'building' and 'house' under the Andhra Pradesh Panchayat Raj Act, 1994:

The central question was whether the storage and water tanks could be termed as 'building' within the meaning of Section 2(3) of the Act and be covered by the definition of 'house' in Section 2(19) of the Act. The Act defines 'building' expansively to include various structures such as houses, outhouses, shops, stables, latrines, sheds, huts, walls, and other similar structures. The term 'house' is defined as a building or hut fit for human occupation, whether as a residence or otherwise, and includes shops, factories, workshops, warehouses, and buildings used for garaging or parking buses or as a bus stand, cattle shed, poultry shed, or dairy shed.

3. Applicability of property tax to storage tanks under the provisions of the Act:

IOC argued that the LPG storage tanks and water storage tanks do not fall under the definition of 'house' as they are not fit for human occupation and are merely pressure vessels used for storage purposes. However, the Supreme Court noted that the definition of 'house' includes buildings used for various purposes, including warehouses. The Court emphasized that the term 'house' is inclusive and not restricted to structures fit for human occupation. The Court referred to various legal definitions and concluded that storage tanks qualify as buildings and warehouses, which are included in the definition of 'house' under the Act.

Conclusion:

The Supreme Court affirmed that the storage and water tanks of IOC are subject to property tax under the Andhra Pradesh Panchayat Raj Act, 1994. The Court held that the expansive definitions of 'building' and 'house' under the Act encompass such structures, and the property tax levied on them is valid. The appeal and writ petition filed by IOC were dismissed with costs.