Municipal advertisement tax cannot exceed the parent Act; statutory exemptions for business-related shop displays must be fully respected.

Municipal advertisement tax rules must conform to the parent Act and the mandatory procedure for tax imposition and rule-making; where the Corporation's required resolution and statutory steps were not followed, the rules were invalid. The charging provision for advertisement tax also had to be read with the express exemption for non sky-sign advertisements relating to the trade or business carried on at the premises; rules that treated such shop displays as taxable exceeded the Act and were ultra vires. The demand notices based on those rules were therefore unsustainable, with refund relief available for tax already deposited and liberty to frame fresh rules in accordance with law.

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Issues: (i) Whether the advertisement tax rules framed by the municipal corporations were valid when the statutory procedure for imposing tax and framing rules had not been followed. (ii) Whether advertisement boards displayed on shop premises for the trade or business carried on therein were taxable despite the statutory exemption for non sky-sign advertisements relating to such trade or business.

Issue (i): Whether the advertisement tax rules framed by the municipal corporations were valid when the statutory procedure for imposing tax and framing rules had not been followed.

Analysis: The power to levy and regulate municipal taxation had to be exercised within the framework of the parent Act. The relevant provisions required the Corporation to originate the tax proposal, follow the prescribed resolution procedure, and act consistently with the statutory scheme governing tax imposition and recovery. The record showed that the procedure contemplated by the Act was not followed and no proper resolution had been passed. Rules framed by the State Government could not override or bypass the autonomy and mandatory procedure vested in the Corporation under the Act.

Conclusion: The rules were invalid and unsustainable for non-compliance with the statutory procedure.

Issue (ii): Whether advertisement boards displayed on shop premises for the trade or business carried on therein were taxable despite the statutory exemption for non sky-sign advertisements relating to such trade or business.

Analysis: The charging provision for advertisement tax was subject to the express proviso excluding certain non sky-sign advertisements, including those exhibited within a building window or those relating to the trade or business carried on within the land or building on or over which the advertisement was displayed. The definition of sky-sign also had to be read with its exclusions. The impugned rules ignored these statutory exceptions and proceeded as if all shop displays were taxable. Such an approach enlarged the levy beyond what the Act authorised and was contrary to the rule that a tax not contemplated by the statute cannot be imposed by subordinate legislation.

Conclusion: Advertisement boards relating to the trade or business carried on at the premises were exempt, and the rules were ultra vires to the extent they purported to tax them.

Final Conclusion: The municipal advertisement tax rules and the demand notices founded on them were struck down, and the petitioners obtained refund relief for tax deposited, with liberty to frame fresh rules in accordance with law.

Ratio Decidendi: Subordinate legislation cannot impose or enlarge a tax beyond the parent Act, and express statutory exemptions for non sky-sign advertisements relating to the trade or business carried on at the premises must be given full effect.

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