THE HONOURABLE SRI JUSTICE B.PRAKASH RAO AND THE HONOURABLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.12344 of 2009 ORDER: (per the Hon’ble Sri Justice Ramesh Ranganathan) The proceedings dated 19.07.2008, issued by the third respondent calling upon the second petitioner herein to pay Rs.8,17,082/- towards service charges in respect of all the Central Government Properties located within the jurisdiction of the Greater Hyderabad Municipal Corporation (for short ‘GHMC’), is under challenge in this Writ Petition. It is the case of the petitioners that the office of the second petitioner, on which service charges are sought to be levied, is under the administrative control of the Ministry of Agriculture, Government of India, and that the said property belongs to the Union of India. The petitioners would submit that, in view of Article 285 of the Constitution of India, the properties of the Union of India is exempted from being subjected to tax by the State; the respondents had no authority or jurisdiction to impose tax in any form over properties belonging to the Union of India; and without either looking into the provisions of Article 285 of the Constitution of India or Section 202 of the Greater Hyderabad Municipal Corporation Act, 1955 (for short ‘the Act’), the respondents were seeking to levy property tax calling it service charges. Sri R.Ramachandra Reddy, learned Standing Counsel for the GHMC, would submit that, under Section 199(1) of the Act, the property tax levied by the Corporation consists of (a) General tax, (b) Water tax, (c) Drainage tax, (d) lighting tax and (e) Conservancy tax and, under Section 202(1) of the Act, it is only general tax which cannot be levied on buildings and lands vested in the Central Government. He would assert that all other taxes mentioned in clauses (b) to (e) of Section 199(1) of the Act can be levied. Learned Standing Counsel would draw attention of this Court to the proceedings dated 15.02.2008 wherein a reference is made to the instructions issued by the Government of India in its proceedings dated 29.03.1967, in support of his contention that the Government would levy service charges equivalent to 75% of the property tax realized from private individuals. It is wholly unnecessary for us to examine whether or not the Corporation can levy taxes other than general tax, on properties belonging to the Union of India in as much as the impugned proceedings dated 19.07.2008 makes no reference to tax being levied under clauses (b) to (e) of Section 199(1) of the Act. On being asked to point out the source of power under the Act to levy such service charges, learned Standing Counsel would fairly state that though there is no such specific provision in the Act, the respondents were nonetheless entitled to collect service charges in view of the instructions issued by the Government of India, dated 29.03.1967. Article 285 of the Constitution of India exempts tax on properties of the Union of India save as Parliament, may by law, otherwise provide. The instructions issued by the Government of India does not constitute law made by Parliament and, as such, the property in question which, admittedly, belongs to the Union of India cannot be taxed in view of Article 285 (1) of the Constitution of India. In more or less similar circumstances the Supreme Court in Municipal Corporation Amritsar V. Senior Superintendent of Post Offices, Amritsar Division[1] observed that circulars issued by the Union of India were administrative in nature; such administrative circulars could not override constitutional provisions and, therefore, could not have overriding effect over the mandate of Article 285(1) of the Constitution of India. In view of the law laid down in Municipal Corporation (cited supra), the impugned proceedings levying service charges, based on the circular issued by the Government of India in the year 1967, is illegal. The respondent Corporation is prohibited from levying tax, in the guise of service charges, on properties belonging to the Union of India. The writ petition is allowed, and the impugned proceedings dated 19.07.2008 issued by the third respondent is quashed. In the circumstances without costs. _________________________ JUSTICE B.PRAKASH RAO ________________________________ JUSTICE RAMESH RANGANATHAN 23rd June 2010 dr [1] (2004) 3 SCC 92