ORDER :

1. Assailing the legal validity of the impugned demand notices, dated 22.12.2022, issued to the petitioners demanding payment of advertisement tax, the present Writ Petition has been filed by the petitioners.

2. Heard learned counsel for the petitioners; and learned Assistant Government Pleader for Municipal Administration and Urban Development for 1st respondent and Sri K. Madhava Reddy, learned Standing Counsel for GVMC, appearing for respondents 2 and 3.

3. Outline facts of the lis may be stated as follows:

The petitioners have been doing various businesses within the limits of Greater Visakhapatnam Municipal Corporation. They have erected name boards relating to their business activity to the premises of their business. Therefore, the impugned notices under Sections 420 and 421 of the A.P. Municipal Corporation Act, 1955, (for short “the Act”) were issued to the petitioners demanding payment of advertisement tax for the period 2022-23. The imposition of the said advertisement tax and issuance of the impugned notices demanding payment of the advertisement tax for the year 2022-23 is assailed by the petitioners in this Writ Petition on the ground that the 2nd respondent Municipal Corporation is not competent to issue any such notices imposing the advertisement tax.

4. As the competency of the Municipal Corporation to impose the advertisement tax is questioned, the three basic provisions relevant in the context to consider to resolve the controversy are Article 265, Article 246 of the Constitution of India and Entry-55 in List-II (State List) of the Seventh Schedule of the Constitution of India. Article 265 of the Constitution of India reads thus:

“265. Taxes not to be imposed save by authority of law: No tax shall be levied or collected except by authority of law.”

5. The aforesaid Article makes it manifest and mandates that in order to impose any tax, the State shall be authorised by law to levy or collect any such tax. Therefore, inevitably there must be specific law authorising or empowering the State to levy and collect tax. In the absence of any law enabling, authorising or empowering the State to impose and collect any tax, levy of such tax would be wholly unconstitutional.

6. Chapter-I of Part-XI of the Constitution of India deals with distribution of legislative powers between Parliament and the Legislature of a State to make laws. Clause (1) of Article 245 mandates that Parliament may make laws for the whole or any part of the territory of India and the Legislature of a State may make laws for the whole or any part of the State. Clause (3) of Article 246 further mandates that subject to clauses (1) and (2) that the Legislature of any State would have exclusive power to make laws for the State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule of the Constitution of India, which is called as the State List. So, the matters on which the State is empowered to make laws are enumerated in List II of the Seventh Schedule in the Constitution, which is referred to as the “State List”. The State is empowered to make laws only in respect of those matters, which are enumerated in List II of the Seventh Schedule.

7. Now, it is significant to note that Entry-55 of List-II authorises the State to make law for collection of taxes on advertisements. Entry-55 of List-II of the Seventh Schedule of the Constitution of India as it stood prior to its repeal, reads thus:

“55. Taxes on advertisements other than advertisements published in the newspapers and advertisements broadcast by radio and television.”

8. Therefore, as per Entry-55 of List-II of the Seventh Schedule of the Constitution of India, the State is empowered to make a law for levy and collection of advertisement tax.

9. Now, in the present context, it is also relevant to consider the power of delegation of the State to impose taxes to the Municipal bodies. A study of the history of Municipal Acts in India shows that the power to