Advertisement tax bye-laws fail when legislative power and statutory enabling provision are both withdrawn

Advertisement tax bye-laws were invalid once Entry 55 of List II was omitted and the enabling provision in the U.P. Municipalities Act was removed. The municipality had no continuing legislative or statutory competence to impose or collect such tax, and bye-laws framed earlier could not survive where they were published only after the legal basis had disappeared. The levy and collection under those bye-laws was therefore without authority of law and the bye-laws were liable to be struck down.

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Issues: Whether the Nagar Palika Parishad, Hathras bye-laws providing for advertisement tax were ultra vires for want of legislative and statutory competence after omission of Entry 55 of List II of the Seventh Schedule to the Constitution of India and omission of Section 128(2)(vii) of the U.P. Municipalities Act, 1916.

Analysis: The bye-laws were published after the coming into force of the constitutional amendment deleting Entry 55 from List II and after Section 128(2)(vii) of the U.P. Municipalities Act, 1916 had been omitted by Section 173 of the Uttar Pradesh Goods and Services Tax Act, 2017. Once the State ceased to have legislative power over advertisement tax and the statutory enabling provision in the Municipalities Act was removed, the municipality could not validly impose or collect such tax. Bye-laws could not survive merely because they had been framed earlier when they were not brought into force until publication.

Conclusion: The bye-laws were ultra vires and liable to be struck down. The levy and collection of advertisement tax under them was authority of law.

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