SC Upholds State Government’s Authority to Impose Permit Fees on Mobile Towers

Supreme Court Law Insider

LI Network

Published on: October 6, 2023 at 10:40 IST

The Supreme Court has affirmed the authority of State Governments to impose permit fees on the installation of mobile towers.

The Court has rejected the argument that States lack the jurisdiction to levy permit fees on mobile towers in the absence of specific legislation from the Central Government empowering them to do so.

This decision upholds a previous judgment by the Chhattisgarh High Court, which asserted that the Chhattisgarh Government had the competence to issue Circulars and Rules for the collection of one-time permit fees when granting approval for the installation of mobile towers within the jurisdiction of Municipal Corporations, Municipalities, and Gram Panchayats.

The bench, consisting of Justices BV Nagarathna and Ujjal Bhuyan, dismissed the case presented by Bharat Sanchar Nigam Limited (BSNL), the appellant. BSNL argued that the matter of permit fees for mobile towers falls under Entry 31 of List I of the Seventh Schedule of the Indian Constitution, which exclusively pertains to the Central Legislature. Entry 31 encompasses posts and telegraphs, telephones, wireless communication, broadcasting, and similar forms of communication.

BSNL contended that the State authorities lacked the power to issue Circulars, Directions, or Rules regarding these subjects.

The central issue under consideration was whether the State Government and local authorities possess the authority to levy taxes, fees, or charges on the installation of mobile towers by BSNL.


The State of Chhattisgarh issued a Circular instructing local authorities to collect a one-time permit fee for the installation of mobile towers within the jurisdictions of Municipal Corporations, Municipalities, and Gram Panchayats, as well as yearly renewal fees.

Subsequently, in November 2009, the permit fee was increased by five times, renewal fees by ten times, and settlement fees by 15 to 50 times through another Circular. In response, the State Government issued the Chhattisgarh Municipal Corporation (Erection of Temporary Tower or Structure for Cellular Mobile Phone) Rules, 2010 (2010 Rules) to govern fee collection.

Both the 2010 Rules and the 2009 Circular were challenged in the High Court, primarily on the grounds of the State’s legislative competence to address the matter.

The State Government argued that the State Legislature was competent to frame the contested Rules because mobile towers, as structures on land or buildings, fall within the domain of the State List under Entry 49 of List II of the Seventh Schedule, which deals with taxes on land and buildings.

However, the High Court upheld both the Circulars and the Rules, dismissing the petitioners’ objections and leading to the current appeal.

Supreme Court’s Observations:

The Court first referred to past judgments that had examined the scope of Entries in various Lists of the Seventh Schedule, including the case of Ahmedabad Municipal Corporation v. GIL Infrastructure Ltd. (2017).

In this precedent, the Court had concluded that, concerning a mobile tower located on land and building, the tax, charge, or fee is not imposed directly on the tower structure itself but rather on the use of the land and building where the tower is installed. Accordingly, the party utilizing the land and building for telecommunication or telegraph services through the mobile tower is liable for the tax or fee.

Based on this analysis, the Supreme Court in the current case asserted that Entry 49 of List II is the only provision enabling the State Government to collect taxes, fees, or charges related to the use of land and buildings for the installation of mobile towers within municipal corporations, municipalities, or nagar panchayats in the state of Chhattisgarh.

Drawing on the Ahmedabad Municipal Corporation case, the Court further affirmed that mobile towers fall under the subject defined in Entry 49 of List II, which pertains to land and buildings. Therefore, the matter was within the purview of the State List.

Considering these factors, the Supreme Court declined to interfere with the High Court’s decision and concluded:

“In the backdrop of the pertinent Entries in List I and List II of the Seventh Schedule of the Constitution and particularly in the context of the judgment of this Court in Ahmedabad Municipal Corporation, we find that the High Court of Chhattisgarh was right in upholding the Circulars and Rules and repelling the challenge made to the same as being devoid of any merit.”


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