Advertisement tax bye-laws fail without legislative competence and statutory authority to impose and recover the levy.

Advertisement tax bye-laws were invalid where the municipal enabling provision had been omitted from the U.P. Municipal Corporation Act and the constitutional support in Entry 55 of List II had been deleted. Without a surviving statutory or constitutional source of legislative competence, the Corporation lacked authority to frame or enforce the levy and recovery bye-laws. Article 265 of the Constitution reinforces that tax can be imposed only by authority of law, so the impugned bye-laws were ultra vires and liable to be struck down.

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Issues: Whether the bye-laws framed for levy and recovery of advertisement tax by the Municipal Corporation were ultra vires after omission of the enabling provision in the municipal law and deletion of Entry 55 of List II.

Analysis: The validity of the bye-laws depended on subsisting legislative competence and an existing statutory source of power. The enabling provision under Section 172(2)(h) of the U.P. Municipal Corporation Act, 1959 stood omitted by Section 173 of the Uttar Pradesh Goods and Services Tax Act, 2017 with effect from 01.07.2017. Independently, Entry 55 of List II of the Seventh Schedule, which earlier supported State legislation on advertisement tax, stood deleted by Section 17 of the Constitution (101st Amendment) Act, 2016. In the absence of a surviving statutory or constitutional source of authority, the Corporation could not validly frame or enforce the impugned bye-laws. Article 265 of the Constitution of India also requires that tax be levied only by authority of law.

Conclusion: The bye-laws were ultra vires and liable to be struck down.

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