MAHANAGAR TELEPHONE NIGAM LIMITED (MTNL) v. DELHI CANTONMENT BOARD, THROUGH CEO

Judgment

#1. The present writ petition has been filed seeking set aside of the impugned order dated 1st January 2026, passed by the Chief Executive Officer, Delhi Cantonment Board, wherein it has been held that the petitioner is liable to pay property tax. 2. The brief facts necessary for deciding the present petition are as follows: 2.1. The petitioner, Mahanagar Telephone Nigam Limited (MTNL), is a Government company incorporated in 1986 and is in occupation of the subject property at Shastri Bazar, Delhi Cantonment. Signature Not Verified Signed By:VIVEK MISHRA Signing Date:23.02.2026 11:01:52 W.P.(C) 2270/2026

2.2. The subject property was never assessed for property tax by the respondent. However, on 1st December 2021, the respondent issued notices under Section 116 of the Cantonments Act, 2006 (hereinafter ‘Act’), seeking information for the purpose of assessment of property tax. This was followed by another notice dated 19th January 2022. 2.3. Thereafter, on 21st March 2022, the respondent issued a notice under Section 76(1) of the Act, proposing assessment for the period 2019– 2022 and raised a demand of property tax of Rs. 1,05,64,603/-. 2.4. The petitioner filed objections by letters dated 10th May 2022 and 21st July 2022, contending that the property is owned by the Union of India and is exempt from property tax under Article 285 of the Constitution of India and Section 111(2)(f) of the Act.

2.5. Despite the objections raised by the petitioner, the respondent

confirmed and determined the Annual Rateable Value (ARV) by communication dated 30th June 2022 and raised a composite demand, inclusive of FY 2022-2023, for Rs. 1,26,67,884/-.

2.6. A notice of demand under Section 100 of the Act was also issued by the respondent on 20th October 2022, followed by recovery notices dated 24th November 2022 and 28th March 2023.

#3. The petitioner filed a writ petition being W.P.(C) 4022/2025, which was disposed of by this Court vide order dated 3rd April, 2025, passing the following directions:- Signature Not Verified Signed By:VIVEK MISHRA Signing Date:23.02.2026 11:01:52 W.P.(C) 2270/2026

#4. Pursuant to the aforesaid order, the petitioner was given a personal hearing by the respondent. The petitioner also filed a representation dated 2nd December 2025. 5. In the impugned order, the issues that arise for consideration have been framed in paragraph 8 of the order, which are set out below:- Signature Not Verified Signed By:VIVEK MISHRA Signing Date:23.02.2026 11:01:52 W.P.(C) 2270/2026

#6. The impugned order holds that the petitioner is a company having a separate identity from the government and therefore, is not exempted from payment of property tax under Article 285 of the Constitution of India. Accordingly, it was not entitled to exemption under Section 111(2)(f) of the Cantonments Act, 2006. 7. It is the contention of the petitioner that the petitioner is not liable to pay property tax as it is exempted under Article 285 of the Constitution of India as well as Section 111 (2)(f) of the Cantonments Act, 2006. Reliance is placed on the judgment of the Supreme Court in Food Corporation of India v. Brihanmumbai Mahanagar Palika & Ors.1 8. Counsel appearing on behalf of the respondent on advance notice, questions the maintainability of the present writ petition. It is submitted that the proper remedy for the petitioner would be to invoke the appellate remedy provided under Section 93 of the Act. It is further submitted that the alternate remedy cannot be held to be onerous merely because there is a requirement to deposit the property tax every year, till the appeal is decided. In this regard, reliance is placed on the judgment in Municipal Corporation of Delhi & Anr. v. Tata Engineering & Locomotive Co. Ltd2, Ashish Malhotra v. NDMC3, and St. Mary’s School & Ors. v. Cantonment Board, Meerut4.