Judgment :- Anand Byrareddy, J: These petitions are heard together as they are filed by the same authority, involving identical circumstances. Heard the learned Counsel for the petitioner and the learned Counsel for the respondents. 2. The facts as are relevant are as follows: The petitioner represents the Post and Telegraph Department, it is stated that Post Offices of the department are established under the Indian Post Office Act. The department is established and controlled by the Union of India. The controversy is in respect of a levy of "service charges" sought to be imposed by the Bruhat Bangalore Mahanagara Palike (hereinafter referred to as 'the BBMP', for brevity) on the premises comprising Post Offices at Bangalore, within the jurisdiction of the competent officer of the BBMP. The BBMP is a statutory Corporation constituted under the Karnataka Municipal Corporations Act, 1976 (hereinafter referred to as 'the KMC Act' for brevity). 3. It is contended that in terms of Article 285(1) of the Constitution of India, the property of the Union is exempt from all taxes imposed by a State or by any authority within a State. It is further contended that Section 110(1)(j) of the KMC Act exempts property of the Central Government within Bangalore City from payment of property tax. However, the respondent - BBMP having questioned the petitioner over non-payment of service charges, by a written notice, the petitioner pointed out that the petitioner is exempted from payment of tax. In response to the same, an order was passed directing the petitioner to pay the service charges due, in terms of a Notification issued by the respondent dated 12.4.2005 wherein, it was notified that those properties failing within the jurisdiction of the BBMP, which are otherwise exempt from payment of property taxes, would however be liable to pay 25% of the said taxes, as service charges, with effect from 1.4.2005. Hence, the petition is filed to primarily contend that under Article 285(1) of the Constitution of India, the property of the Union of India is exempt from any kind of tax or levy by the State Government or any Corporation or other local authority of the State Government and hence it is prayed that the demand for payment of service charges for the period between 2005-06 to 2007-08 be quashed. Whereas in the second of these petitions, a notice issued under Section 147 of the KMC Act indicating to the petitioner that there is no provision to grant exemption in respect of the service charges under the KMC Act, is sought to be questioned. 4. The learned Counsel for the petitioner has placed reliance on the following judgments in support of his contentions, namely, a) Union of India Vs. Puma Municipal Council and Others, (1992) 1 SCC 100 b) Municipal Corporation, Atnritsar Vs. Senior Superintendent of Post Offices, Amritsar Division and Another, (2004) 3 SCC 92 . 5. On the other hand, the learned Counsel for the respondents would admit that the Post Office is a department of the Union of India, but the further contention that what is sought to be imposed on the property is property tax, is disputed. The nature of demand, it is contended, is otherwise. It is pointed out that the BBMP has several civic duties, insofar as maintaining the city which involves wide ranging activity, incidentally, it collects revenue including, property tax and service charges for the services rendered. The levy of property tax by the State Government is in terms of Entry-49 of List-II appended to the VII Schedule to the Constitution. The Entry enumerates the subject on which the State Government could impose tax namely, land and buildings. The charging Section in respect of such impost is to be found under the KMC Act as provided under Section 103(b) of the Act. While Section 110 of the KMC Act deals with general exemptions and that the Commissioner, BBMP is empowered to grant exemptions, in respect of land and buildings enumerated therein from payment of property tax. More particularly, Section 110 (1)(j) and Section 119(2) are relevant. The learned Counsel would submit that from a reading of the above provisions, buildings or lands belonging to the Central Government or the State Government used for the purposes of such Government, not being used for residential or commercial purpose, cannot be made subject to payment of property tax. Therefore, it would follow that the properties of the Central Government being used for residential or commercial purposes are not exempted from payment of property tax. However, it is admitted that the BBMP cannot impose tax on property of the Union of India when it is used for the purposes of the Government. Therefore, it would follow that the properties of the Central Government being used for residential or commercial purposes are not exempted from payment of property tax. However, it is admitted that the BBMP cannot impose tax on property of the Union of India when it is used for the purposes of the Government. In any event, the demand and the controversy is not in respect of property taxes, but the imposition of service charges, for services rendered. There is no provision under the KMC Act under which the Central Government can claim exemption from payment of such charges. It is in that context that the demand has arisen. The service charges payable are at the rate of 25% of the property tax that would be attracted in respect of any building or land belonging to the Union Government or other properties which are exempted from payment of tax. Since 1.4.2005 the respondents are collecting 25% of the amount of property tax payable as service charges for providing civic amenities. In this regard, the Act has been amended, whereby Section 110 and Schedule-III of the KMC Act are suitably amended to provide the competence to levy and collect service charges on buildings exempted from payment of property tax. Therefore, there is statutory sanction for the respondents to levy and collect the service charges. In the absence of a challenge to the said amendment, it cannot be contended that the demand is without jurisdiction. Article 285 of the Constitution of India deals with exemption of property of the Union Government from State Taxation, but the charges which are to be collected cannot be characterised as a tax and the question of exemption in terms of Article 285 of the Constitution would not arise. It is contended that Section 58 of the KMC Act enumerates obligatory functions of the Corporation which, inter alia, requires the BBMP to ensure cleaning of public streets and public places and removal of garbage from the city roads and public places, disposal of sewerage, construction of roads, public paths, and public toilets, maintenance of lights in public streets and removal of all noxious vegetation and abatement of nuisances, etc. The Petitioner and its men generate solid waste: This is routinely cleared by the Corporation which is a direct service provided to the petitioner. The Petitioner and its men generate solid waste: This is routinely cleared by the Corporation which is a direct service provided to the petitioner. The drainage of rain water from the premises of the petitioner has to be effectively handled apart from the sewerage system maintained by the BBMP. There are other tangible and intangible services which are utilised by the petitioner, without which the property itself would be inaccessible and uninhabitable. It is in that background that the respondents are claiming statutory dues towards service charges which is at a nominal 25% of the total amount of property tax payable. That the reference to property tax is only to provide a ready measure of the reasonable service charges attracted. Hence, the demand cannot be deemed as illegal and without authority of law. The learned Counsel would place reliance on the judgment of the Apex Court in Union of India and Others Vs. State of Uttar Pradesh, (2007)2 SCC 324 , which according to the learned counsel, would squarely apply to the facts of the present case. The learned Counsel for the respondents has also produced receipts in respect of collection of service charges from other entities which are otherwise exempted under the provisions of the KMC Act from payment of property taxes. 6. In order to appreciate the rival contentions, the relevant provisions may be noticed and they are extracted hereunder for ready reference. Under Chapter-X of the KMC Act, Section 103 which provides for the taxes that may be imposed and Section 110 which provides for General exemptions in respect of property tax, read as follows:- "103. Taxes which may be imposed.—Subject to the general or special orders of Government, A Corporation shall,— (a) x x x; (b) (at rates not exceeding those specified in this Act) levy any one or more of the following taxes,— (i) a tax on (buildings or vacant lands or both) situated within the city (hereinafter referred to as the property tax); (ii) x x x; (iii) x x x; (iv) x x x; (v) x x x; (vi) a tax on advertisement; (vii) a duty on certain transfers of property in the shape of an additional stamp duty; (viii) x x x; (ix) x x x; "110. General Exemptions.—(1) The following buildings and lands shall be exempted from the property tax,— (a) ................................ (b) ................................ (c) ................................ (d) ................................ (e) ................................ General Exemptions.—(1) The following buildings and lands shall be exempted from the property tax,— (a) ................................ (b) ................................ (c) ................................ (d) ................................ (e) ................................ (f) ................................ (g) ................................ (h) ................................ (i) ................................ (j) buildings or lands belonging to the Central Government or any State Government used for purposes of Government and not used or intended to be used for residential or commercial purposes; (k) ................................. (1) ................................ Provided that............................................................................. Provided further that for purposes of clause (j), a certificate issued by Government or any officer duly authorised by Government that any building or vacant land is used for purposes of Government and not used or intended to be used for residential or commercial purposes shall be binding on the Corporation. (2) Notwithstanding the exemptions granted under this section, it shall be open to the Corporation to collect service charges for providing civic amenities and for general or special services rendered at such rates as may be prescribed. (Sub-section (2) inserted by Act No.31 of 2001, with effect from 19.11.2001, vide Notification No.UDD 89 AHD 2000(Pt-1), dated 12.11.2001)" Further, under Schedule-III of the KMC Act, which provides for taxation rules, Rule 7-A has been inserted by Notification No.UDD 65 MNU 2002 dated 27.2.2004 with effect from 9.3.2004. It is by recourse to these provisions, that the BBMP seeks to levy service charges in respect of the Post Offices which are properties of the Union Government. Insofar as the Contention of the petitioner that Article 285(1) of the Constitution of India, providing for exemption of property of the Union from State Taxation is concerned, the Article reads as follows: "285. (1) The property of the Union shall, saveinso far as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State. (2) Nothing in Clause (1) shall, until Parliament by Law otherwise provides, prevent any authority within a State from levying any ax on any property of the Union to which such property was immediately before the commencement of this Constitution liable or treated as liable, as long as that tax continues to be levied in that State." The question therefore for consideration would be, whether the BBMP is in a position to levy service charges, though not called as a tax, on the petitioner. From a reading of the above Article, it is clear that both Sub-clauses (1) and (2) of Article 285, provide overriding power to the Parliament to make a law contrary to is provided in the Article namely, the immunity of union property from State taxation provided by clause (1) may be withdrawn if Parliament makes a law to that effect. Secondly, the existing right of a local authority to tax union property under Clause (2) may similarly be taken away by a law made by the Parliament. The phrase "save insofar as Parliament may by law otherwise provide" would suggest that the Parliament may by law, permit the State or any authority within the State to impose a tax on union property. The object of Clause (1) is therefore not to prevent the State or local taxation of union property altogether, but to bring it under the control of the Parliament and the words used "all taxes" would have to be interpreted in a wide sense including any imposition or levy in the nature of tax, for otherwise, the State Government would be able to do something indirectly what it cannot do directly. This would also follow from Article 366(28). Article 366 which has defined several expressions, used in the body of the Constitution of India, defines 'taxation' under Clause-28 as follows: "(28) 'taxation' includes the imposition of any tax or impost, whether general or local or special, and 'tax' shall be construed accordingly;" It is well settled that the word "Tax", in its widest sense, includes all money raised by taxation, including taxes levied by the Union and State Legislatures; rates or other charges levied by local authorities under statutory powers. -(See: Ghouse vs. State of Kerala, AIR 1980 SC 271 Para-5) Further, under Article 285, the exemption relates not only to tax imposed by the State itself, but also by separate bodies like, Municipal Corporations and other Local authorities, who cannot possibly have a larger power than the State itself by which they are created. -(See: Ghouse vs. State of Kerala, AIR 1980 SC 271 Para-5) Further, under Article 285, the exemption relates not only to tax imposed by the State itself, but also by separate bodies like, Municipal Corporations and other Local authorities, who cannot possibly have a larger power than the State itself by which they are created. The further question that would arise is whether the service charges that are sought to be imposed would fall outside the definition of 'tax', the KMC Act defines 'tax' under Section 2(41) as follows: "Tax includes, toll, rate, cess, fee or other impost leviable under this Act" Though "service charges" are absent from the definition, "service charges" are not defined elsewhere under the Act, either. Under Rule 7A, there is an indication that service charges are the consideration for providing "civic amenities" in respect of the building which is exempted from property tax. The expression "civic amenities" are again not defined under the Act. There is no dictionary definition which could be applied as being relevant, as for instance, amongst several dictionaries referred to, the Black's Law Dictionary, 8th Edition carries the following:- "Service Charge 1. A charge assessed for the performing of a service, such as the charge assessed by a Bank against the expenses of maintaining or servicing a customer's checking account. 2. The sum of (1) all charges payable by the buyer and imposed by the seller as an incident to the extension of credit and (2) charges incurred for investigating the collateral or creditworthiness of the buyer or for commissions for obtaining the credit." The Chambers Dictionary defines 'service charge' as being a charge made for service in a restaurant or hotel, usually a percentage of the bill. The Bangalore Development Authority Act, 1976, defines 'amenity" and 'civic amenity' as follows:- 2(b) "Amenity" includes road, street, lighting, drainage, public works and such other conveniences as the Government may, by notification, specify to be an amenity for the purposes of this Act; (bb) "Civic amenity" means,— (i) a market, a post office, a telephone exchange, a Bank, a fair price shop, a milk booth, a school, a dispensary, a hospital, a pathological laboratory, a maternity home, a child care centre, a library, a gymnasium, a bus stand or a bus depot; (ii) a recreation centre run by the Government or the Corporation; (iii) a centre for educational, social and cultural activities established by the Central Government or the State Government or by body established by the Central Government or the State Government; (iv) A centre for educational, religious, social or cultural activities or for philanthropic service run by a Co-operative Society Registered under the Karnataka Co-operative Societies Act, 1959 (Karnataka Act 11 of 1959) or a Society Registered under the Karnataka Societies Registration Act, 1960 (Karnataka Act 17 of 1960) or by a Trust Created wholly for Charitable, Educational or Religious purposes; (v) a Police Station, an Area Office or a Service Station of the Corporation or the Bangalore Water Supply and Sewerage Board or the Karnataka Electricity Board; and (vi) Such other amenity as the Government may, by notification, specify." According to the above definition, a "Post Office" is itself a civic amenity. Insofar as the case law on the subject of taxation of property of the Central Government by a State Government or other entity is concerned, the following is the summary of the law laid down under the several decisions of the Apex Court which would be relevant. In Union of India Vs. Purna Municipal Council and Others, (1992) 1 SCC 100 , the Union of India had challenged a demand made by the Municipal Council, Puma, towards "service charges" for a period spread over six years, before the Bombay High Court. The Union of India had claimed that the demand was opposed to Article 285 of the Constitution of India read with Section 135 of the Indian Railways Act, 1890. The Union of India had claimed that the demand was opposed to Article 285 of the Constitution of India read with Section 135 of the Indian Railways Act, 1890. The High Court had opined that in terms of Article 285(2), the liability to pay the taxes 'until Parliament by law otherwise provides', reliance placed on Section 135 of the Indian Railways Act was negatived on the footing that the said provision cannot have any overriding effect against the continuance of such law, under which the levy was imposed, when authorized by Article 285 (2) of the Constitution. It was held that the Railways Act was not an Act made by the Parliament as contemplated under Clause 2 of Article 285 of the Constitution. Reversing the decision of the High Court, the Apex Court held that Section 135 permits taxation of the railways by a local authority in the manner provided therein, namely, that it was permissible if the Central Government, by notification in the Official Gazette had declared the railway administration to be liable to pay the tax. The Central Government being the controlling and the regulating authority permitting liability at a given point of time, its extent and manner. The Indian Railways Act being a Central enactment had "no role to play in sub-article (2) of Article 285, for that is a sphere in which the State legislation operates. The reasoning of the High Court to oust the applicability of Section 135 of the Indian Railways Act on the test of sub-article (2) of Article 285 was totally misplaced , as also not venturing to create room for it in sub-article (1) of Article 285. The interplay of the constitutional and legal provisions being well cut and well defined requires no marked elaboration to stress the point." In Municipal Corporation, Amritsar Vs. Senior Superintendent of Post Offices, Amritsar Division and Another, (2004) 3 SCC 92 - there was a demand for payment of service charges, by the Municipal Corporation made on the respondent therein, for having provided various services — such as water supply, street-lighting, drainage, approach roads to the property of the respondents. The respondent claimed exemption from all taxes under Article 285 (1) of the Constitution of India. The High Court of Punjab and Haryana, inter alia, held that the demand of service charges made by the Corporation was violative of Article 285. The respondent claimed exemption from all taxes under Article 285 (1) of the Constitution of India. The High Court of Punjab and Haryana, inter alia, held that the demand of service charges made by the Corporation was violative of Article 285. The two questions that arose before the Supreme Court for determination were as follows: (a) Whether the demand for service charges so made by the Corporation against the respondents is by way of "service charge" or by way of "tax"? (b) If it is held that the demand so made by way of "tax", whether the same is violative of Article 285 (1) of the Constitution of India? The Apex Court held that the demand made was with regard to the services rendered to the respondents' Department, like water supply, street-lighting, drainage and approach roads to the land and buildings. In the counter, the respondents averred that they were paying for the services rendered by the appellant Corporation by way of water and sewerage charges and power charges separately. It was also averred that no specific services were being provided to the respondents, for which the tax in the shape of service charges could be levied and realized from the respondents. There was no provision in the Municipal Corporation Act for levying service charges. The only provision was by way of tax. It was held that there was no dispute that the Corporation was collecting tax from the general public for water supply, street-lighting and approach roads etc. Thus it was held that it was tax that was sought to be imposed in the garb of "service charges". It was further held that it was not within the competence of the Corporation to impose tax on the property of the Union of India, the same being violative of Article 285 (1) of the Constitution. It was also observed that the view expressed in Purna Municipal case supra, which was reiterated in Union of India Vs. Ranchi Municipal Corporation, (1996) 7 SCC 542 , clearly covered the issues. In Union of India and Others Vs. State of U.P. and Others - the Union of India had challenged recovery proceedings initiated against it for the demand raised by the Jal Sansthan, Allahabad, as water and sewer charges. The Allahabad High Court had rejected the petition filed by the appellant. In Union of India and Others Vs. State of U.P. and Others - the Union of India had challenged recovery proceedings initiated against it for the demand raised by the Jal Sansthan, Allahabad, as water and sewer charges. The Allahabad High Court had rejected the petition filed by the appellant. The plea of the appellants was that they were holding the property of the Central Government and hence service charges were not payable under Article 285 of the Constitution of India as such charges were in the nature of a tax. On the other hand, the Jal Sansthan contended that the claim towards the water and sewer charges was not a tax. The Apex Court held that the Jal Sansthan had been established under the Allahabad Jal Sansthan and Uttar Pradesh Water Supply and Sewerage Act, 1975. It had taken over the duties of supply of water and maintenance of Sewers from the Municipality. Prior to this the appellants were paying for services like water supply and sewerage to the then Municipality and hence the question, according to the Apex Court, was whether service charges towards services like supply of water and sewerage could be said to be a tax on the property of the Union of India. The Apex Court, while drawing attention to the distinction between a tax and a fee, held it was necessary to ascertain the nature of the levy, namely, whether it was in the nature of tax or whether it was in the nature of a fee for services rendered by any instrumentality of the State like the Jal Sansthan. It was held that as it was apparent that the Jal Sanstan was maintaining the water supply and sewerage system and it was that entity who bore all the expenses for the maintenance of the same, and it had to create its own funds — the levy under the above said Act was held as being a must. It was further held that though the expression 'tax' had been used in the Act, it was in fact in the nature of a fee for services rendered. The apex took note of the decision in Sona Chandi Oal Committee Vs. Stare of Maharashira, (2005) 2 SCC 345 , wherein the question was whether levy of inspection fee for renewal of moneylender's licence was valid or not. The apex took note of the decision in Sona Chandi Oal Committee Vs. Stare of Maharashira, (2005) 2 SCC 345 , wherein the question was whether levy of inspection fee for renewal of moneylender's licence was valid or not. It was held that the fee charged was regulatory in nature to further the objects of the Act and it had a nexus with the services rendered to money lenders. However, it was observed that a service to be rendered was not a condition precedent, only there should be a reasonable relationship between the levy of fee and services rendered and in that context the validity of the levy of a fee under the Bombay Money Lenders Act, 1946 was affirmed. It was also noticed that in Vijayalakshmi Rice Mill and Others Vs. Commercial Tax Officers, Palakol and Others, (2006) 6 SCC 763 , the distinction between fee, cesses and taxes was considered. It was held that ordinarily a tax generates general revenue and is not necessarily collected for any service rendered. But the nomenclature is not important. Sometimes a 'tax' may be in reality a fee, depending upon its nature. It was observed that the earlier concept of fee had undergone a sea change and the rendering of a specific service to a particular payer of a fee was no longer considered necessary to sustain the levy, provided there is a broad and general corelationship between the totality of the fee imposed and the totality of the expenses on the service rendered. It would appear from the decision in Purna Municipal Council case, referred to above, that the Apex Court has treated "service charges "as a tax, though it is not apparent from the report as to the nature of service provided to the Railways by the Municipal Corporation. It would appear from the decision in Municipal Corporation Amritsar, that the present case on hand is covered on all fours by the same. As it is evident that from a reading of the definition of "tax" under the KMC Act and the enumeration of taxes which may be imposed under Section 103 of the Act, which include tolls, duties, rates, and did include cesses too, and at rates specified in the Schedules to the Act. Service charges being sought to be levied at 25% of the property tax is clearly a demand which can only be characterized as a tax. Service charges being sought to be levied at 25% of the property tax is clearly a demand which can only be characterized as a tax. The vague indication that it is collected towards the services rendered in providing "civic amenities" is not in respect of any particular special services provided to the petitioner, in order that the decision in Union of India Vs. State of UP could be applied to sustain the demand. The Jal Sansthan in Allahabad, which may be likened to the Bangalore Water Supply and Sewerage Board-in Bangalore, was claiming charges payable for particular services rendered in that case. Though it may be true that the BBMP incurs a huge expenditure in providing and maintaining "civic amenities" and all of which may not even be able to be met out of the entire property tax collected, the demand for even a nominal measure of the tax payable towards such general expenditure, is impermissible by recourse to the amended Section 110 read with the amendment to Schedule III, Part II, Rule 7A thereto insofar as the petitioner and the property of the Union Government is concerned. The nomenclature "service charges" does not make it any less an impost in the nature of tax — as it is not relatable to any special services rendered to the petitioners-apart from providing access to the infrastructure that is available to all, whether a tax payer or otherwise. But the day may not be too far off when the BBMP may be in a position to levy a fee for specific services to be provided. However, the present impost impugned herein clearly falls foul of Article 258 (1) of the Constitution of India. Accordingly, the Writ Petitions are allowed and the impugned annexures are hereby quashed insofar as the petitioner is concerned.