TaxTMI 
TaxTMI 
2015 (1) TMI 1415
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....lendra 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 payment of advertisement tax. The provisions co....
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....en 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 sticking on it. (2) No person or the owner of a house structure shall without....
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....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 of the financial year i n which permission is granted, whichever is earlier. 9. No advertisement of any shop shall without prior permission of Mukhya Nagar Adhikari ....
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....i) 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 with Section 192 of the Act. 8 So far as the first limb of argument of Sri Nageshwar Rao is concerned, it does not seem to be no more res integra. The controversy has been settled by the Full Bench of this court in the case of Writ Petition No.3336 (M/B) of 2010 (Anugar Bansal. Vs. State of U.P. and others), decided on 20.4.2011.....
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....e 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 that without written permission of the Municipal Commissioner, no advertisement shall be exhibited. It further provides that in case advertisement contravenes any bye-law made by the corporation under Clause (48) of Section 541 of the Act, no permission shall be granted. It further provides that the permission shall be granted only for the period for which tax is paid. ....
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..... 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 original power to impose tax vests in the Corporation itself. Any other meaning given to statutory provision will make the corporations a department of the State Government which does not seem to aim and object of Article 243 (Q) and other related provisions of the Constitution. 64- Under Section 306 of the Act also power has been conferred on the Municipal Commissioner to ensure that the advertisement should be remove....
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....d 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 vehicles other than mechanically propelled vehicles, and other conveyances plying for hire or kept within the City or on boats moored therein: (c)a tax on helicopters or any other type of planes, when they land on or take off from the helipads, airports, airstrips or places made for this purpose situated within the Corporation. The tax so imposed shall be paid by the airport authority or person or persons, or managers, or director or institution or department or agency invo....
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.... 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 name of the land or building upon or over which the advertisement is exhibited, or the name of the owner or occupier of such land or building, or (d) relates to the business of any railway administration, or (e) is exhibited within any railway station or upon any wall or other property of a railway administration except any portion of the surface of such wall or property fronting any street. Explanation 1-- The word "structure" in this section shall include any movable board on wheels used as an advertisement or an advertisement medium. Explanation 2-- "Public place" shall, for the purpose of this section mean any place which is ....
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....n 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 building upon or over which such 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." 14. The decision of the Madras High Court in V.Vasudev Bhat's case (supra), in my considered opinion applies on all its fours and for the very same reasons, findings and conclusions, the petitioners are entitled to exemption from payment of advertisement tax under the third proviso to Section 134 of the Act. The order of the Special Commissioner, impugned and the demand for payment of tax by the notices impugned are illegal." 15 Karnataka High Court has followed the judgment of Madras High Court in the case reported in (19....
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....ght 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 outlet, no Advertisement Tax can be levied in view of the proviso (c) to Section 122(1) of the Act. Since it is the categoric case of the petitioner on facts that the Dealer Boards have been erected or displayed by it on the outlet, shops or buildings where one of the activity of the 'business' or 'trade' carried on includes the sale of the products marketed or distributed by the petitioner, no Advertisement Tax is leviable on such Dealer Boards. This declaration of ours, however, is subject to the caveat that wherever the Municipal Corporation is able to establish that the business carried on within the land, building, shop or outlet where the Dealer Boards have been erected or displayed does not at all include the sale of the products marketed or distributed by....
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....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 continuous face and not open work and does not extend in height more than three feet above any part of such wall, parapet or ridge; or (iii) any representation which relates exclusively to the business of a railway administration as defined in the Indian Railways Act, 1890, and which is placed wholly upon or over any railway station yard, platform or station approach, or premises belonging to such railway administration, and which is also so placed that it could not fall into any street or public place;" 20 In view of definitions given under sub-section (1) and (71) of Section 2 of the Act, it appears that wherever any hoarding or similar structure are used to display certain thing for the purpose of advertisement, shall be deemed to be an advertisement. The definition of advertisement is comprehensive in nature. However, in case we go t....