A division bench of Justices Akil Kureshi and Sonia Gokani held that mobile towers were not buildings and property tax should not be levied on them.
The bench also ordered to refund the property tax collected so far from different companies throughout the state.
"The State Government had introduced Gujarat Local Authorities Amendment Act, 2011 under the provisions of which district panchayats, taluka panchayats and gram panchayats, were given powers to levy property tax on mobile towers in their respective areas," said senior counsel Shalin Mehta who represented the petitioners in the case.
Advocate General, Kamal Trivedi, appearing for the state government, had argued that the mobile towers were structures and were part of the buildings and therefore property tax could be levied on them.
Following the pronouncement of order, the State Government demanded a stay as it sought to approach the higher forum which was granted by the bench and stayed its order till June 15.