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2015 (1) TMI 1415
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....or Respondent :- C.S.C.,R.K. Singh,Shailendra Singh Chauhan. JUDGEMENT Devi Prasad Singh, 1 This bunch of writ petitions, has been preferred against the notices issued by the Nagar Nigam, Lucknow, Nagar Nigam Allahabad and Nagar Nigam Bareilly in view of tax imposed for advertisement in their respective shops in pursuance of power conferred by Rules framed for the purpose. Respective Nagar Nigam of these three districts framed Rules in pursuance of provisions contained in Section 227 read with Section 192 and 219, 540 (1) and 550 of Uttar Pradesh Municipal Corporation Act, 1959 (in short the Act) superseding all existing Rules. 2 The Rules of three Nagar Nigams are identical in nature and for the purpose of disposal of these writ petitions, the Rules framed by the Lucknow Nagar Nigam namely, the Lucknow Municipal Corporation (Assessment and collection of tax on advertisements not being advertisements published in news papers) Rules, 2000 ( in short the rules,) is taken as leading one of the leading Writ Petition No.9629 (M/B) of 2007. 3 The petitioners have challenged the vires of Rules followed by notices issued in pursuance of power conferred by Rules demanding the....
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....e rejected on certain grounds. Under Rule 7, it has been provided that tax shall be paid for the whole year in three instalments. Rule 9 deals with the advertisement over the shop and Rule 10 further provides that any advertisement done without prior permission may be wiped off by the Nagar Nigam. Rule 12 imposes certain restriction over the advertisement whereas Rule 13 empowers Mukhya Nagar Adhikari to remove any advertisement. For convenience, Rule, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13 of the Rules are reproduced as under:- "3. (1) No person shall without obtaining permission from the Mukhya Nagar Adhikari:- (a) display, paste, exhibit, write or draw any advertisement or any kind of picture which gives an impression of being an advertisement to common prudent person, on any house, bridge, street, footpath or the land appurtenant to it. Tree, Nagar Prachir (Boundary wall), city gate, electric or telephone poles, moving vehicles or any open place within the limits of the Corporation; or (b) display, exhibit or hang any type of advertisement to any street, road, bridge, Nagar Prachir, City gate, electric or telephone poles, on moving vehicles or by stic....
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....fic or due to any other reason. (c) the site is unsuitable in the reasonable, opinion of the Mukhya Nagar Adhikari, or (d) the advertisement is contrary to the provisions of any law for the time being in force. 6. The permission shall be for the period specified in the permission letter. The annual permission shall be for the maximum period of one year from the date of the permission or upto 31st March of the financial year in which permission is granted, whichever is earlier. 7. The tax shall be payable for the whole year in three instalments. First instalments of 30% of the tax shall be payable in April, in every financial year. The second instalment of 40$ and Third instalment of 30% shall respectively be payable in July and October in every financial year. 8. A permission shall also be obtained from Mukhya Nagar Adhikari for displaying any advertisement which is different from the advertisement referred to in the schedule and the amount of tax payable for such advertisement shall be such as may be fixed by the Mukhya Nagar Adhikari. The duration of such permission shall be one year from the date of the permission or upto 31st March o....
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....ont of Hathi Park and Buddha Park, (vii) In front of Income Tax Office, Ashok Marg, (viii) royal Hotel Crossing and Co-operative Building Footpath, (ix) Islands and in front of statues and all other main Chaurahas, (x) around the General Post Office (G.P.O. Crossing), and (xi) Allahabad Bank Crossing, Hazratganj to Charan Hotel, in front of Charbath Railway Station (Ravindralaya to Nattha Hotel Tiraha). 13. It shall be lawful for the Mukhya Nagar Adhikari to remove any advertisement or hoarding being displayed in contravention of these rules and expense of the removal of such an advertisement shall be recoverable from the advertiser as the dues of the corporation, in accordance with Chapter XXI or the Act." 7 While assailing the impugned Rules, Sri Nageshwar Rao, learned Senior Counsel assisted by Sri Vikas Singh has raised two fold arguments; firstly, the Rules, have been framed not by following procedure provided under the Act with due resolution of the Board and secondly, the imposition of tax over the advertisement in the shop of a building is beyond jurisdiction in view of the provisions contained in Section 172 read wit....
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....efinition clause as well as provision contained in Section 172 as well as other provisions contained in Chapter IX of the Act. 57- The power conferred on the Corporation under Section 172 of the Act contains the power to impose tax on trades, professions, transfer of property, tax on vacant land and so on. Sub-section (2) of Section 172 empowers the Corporation to impose tax in addition to the tax specified in Sub-section (1) for the purposes of Act and subject to the provisions thereof. The power contained in Sub-section (1) of Section 172 is quite exhaustive and empowers the Corporation to impose tax on any matter in furtherance of the Act. Sub-section (4) of Section 172 of the Act further clarifies that the power of the Corporation to impose tax shall be similar as of the State Government, meaning thereby, power of State Government to impose tax under List 2 of Schedule-7 of the Constitution, shall be available to the Corporations to impose taxes within their jurisdiction. 58- Apart from Sub-section (2) of Section 172, Section 192 confers additional power to the Corporation empowering it to impose tax on the advertisement. Further Section 193 provides ....
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....ic provisions how the tax should be imposed. Under Section 199 of the Act, proposal should be prepared by the Corporation for imposition of tax through its executive committee. The executive committee of the Corporation shall pass resolution with regard to tax and thereafter it shall send to the state government. The State Government may reject, sanction or modify the proposal under Section 201 of the Act. The Provisions contained in Sections 201, 202 and 203 of the Act abundantly clears that the initial proposal with regard to imposition of tax falling within the domain of corporation should be mooted from corporation. The state government may approve or disapprove the proposal with regard to imposition of tax. 62- Under Section 205 of the Act, the state government has power to abolish certain tax in certain circumstances. The government may also direct the corporation to impose tax under Section 206 of the Act by publishing its direction or order in the official Gazette and order so notified shall be implemented by the Corporation through its special resolution. 63- Thus, the power of the state government is supervisory power with regard to tax matter whereas or....
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....172, 192, 193, 194, 195 and 196 and 199 of the Act. However, the government has right to frame model rules or issue direction under Section 206 of the Act to impose certain taxes by publication in official gazette. Thus, the impugned rules seem to have been framed in contravention of statutory provision contained in the Act. Hence, the judgment in Taj Advertising (supra) seems to not lay down a correct law." 9 Admittedly, no resolution was passed by the Municipal Corporation and the procedure contained in Chapter IX of the Act, have not been followed. Accordingly, impugned rules, seem to have been framed arbitrarily without following due statutory procedure contained in the Act hence seem to be not sustainable. 10 Section 172 further restricts the power of Municipal Corporation and is subjected it to Article 285 of the Constitution. For convenience, Section 172 is reproduced as under:- "Section 172. Taxes to be imposed under this Act:- (1) For the purposes of this Act and subject to the provisions thereof and of Article 285 of the Constitution of India, the Corporation shall impose the following taxes, namely.- (a) Property taxes; (b) a tax on vehic....
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....on or over any land, building, wall, hoarding or structure any advertisement or who displays any advertisement to public view in any manner whatsoever, in any place whether public or private, shall pay on every advertisement which is so erected, exhibited, fixed, retained, or displayed to public view, a tax calculated at such rates and in such manner and subject to such exemptions as may be provided by the Act or rules made thereunder: Provided that no tax shall be levied under this section on any advertisement or a notice-- (a) of public meetings, or (b) of an election to any legislative body or the Corporation, or (c) of a candidature in respect of such an election: Provided also that no such tax shall be levied on any advertisement which is not a sky-sign and which-- (a) is exhibited within the window of any building, or (b) relates to the trade or business carried on within the land or building upon or over which advertisement is exhibited, or to any sale or letting of such land or building or any effects therein or to any sale, entertainment or meeting to be held upon or in the same, or (c) relates to the ....
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....ny advertisement which is not a sky-sign and which- (a) is exhibited within the windows of any building; or (b) relates to the trade or business carried on within the [vacant land or building] upon or over which such advertisement is exhibited, or to any sale or letting of such [vacant land or building] or any effects therein or to any sale, entertainment or meeting to be held upon or in such [vacant land or building]; or (c) relates to the name of the [vacant land or building], upon or over which the advertisement is exhibited, or to the name of the owner or occupier of such [vacant land or building]; or (d) relates to the business of any railways; or (e) is exhibited within any railway station or upon any wall or other property of a railway except any portion of the surface of such wall or property fronting any street." 9. In V. Vasudev Bhat's case (supra), the third proviso to Section 129-A of the City Municipal Act reads thus: "Provided further that no such tax shall be levied on any advertisement which is not a sky-sign and which (a)--------- (b) relates to the trade or business carried on within the land or bu....
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...., shops or buildings where the trade or business pertaining to the products sold or marketed by it is also carried on, these boards relate to the 'trade' or 'business' carried on within such outlets, shops or buildings and are excepted from the Advertisement Tax under proviso (c) of Section 122(1) of the Act. The Municipal Authorities have apparently not undertaken any exercise to refute or admit the afore-stated fact based contention specifically raised by the petitioner in para 2 of the writ petition and are heavily banking upon the principle of pre- dominance to urge that the protection of the exemption clause is admissible only where an outlet, shop or building displaying the Dealer Board is in exclusive use for the trade or business of the products sought to be advertised. [29] For the reasons afore-stated, we hold that so long as the trade, profession or business being carried on within the land, building, shop or outlet etc. also includes the trade, profession or business in the goods, services and/or any other taxable activity in relation to which the advertisement board has been erected, exhibited fixed or retained upon such land, building, shop or....
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....dapted to be used for the display of advertisement;" 2 (71) "sky-sign" means any word, letter, model, sign, device or other representation, in the nature of an advertisement, announcement or direction, which is supported on or attached to any post, pole, standard, framework or other support wholly or in part upon, over or above any building or structure and which is wholly or in part visible against the sky from any point in any street or public place, and includes-- (a) every part of support, and (b) any balloon, parachute or similar device employed wholly or in part of the purposes of any advertisement or announcement, on, over or above any building, structure or erection of any kind, or on or over any street or public place; but shall not be deemed to include-- (i) any flagstaff, pole, vane or weathercock unless adapted or used wholly or in part for the purposes of any advertisement or announcement; (ii) any sign on any board, frame or other contrivance securely fixed to or on the top of the wall or parapet of any building, on the cornice or blocking course or any wall or to the ridge of a roof, if such contrivance be of one ....