Taxation on non-commercial educational signage is invalid as it does not meet the advertisement criteria defined in the Bye-laws, reaffirming that educational institutions are charitable entities, exempt from such tax.

ORDER :

1. The captioned petition is filed challenging the legality and validity of tax demand issued by respondent No.2/Assistant Revenue Officer, BBMP under Section 134 of the Karnataka Municipal Corporation Act, 1976 (hereinafter referred to as 'the Act') for alleged advertisement displayed on the petitioner/institution on its premises.

2. Brief facts leading to the case are as under:

Petitioner is a registered educational institution engaged in imparting education through its college located within the jurisdiction of respondent No.1/Corporation. Petitioner is running an institution in the name of Gupta College in the building bearing No.808, 100 feet Ring Road, Hosakerehalli, BSK III Stage, Bengaluru-85. Petitioner has purchased the above said property comprising of four floors in 2004 and intended to run an educational institution. In 2007, the institution is recognized by the name Gupta College and the same is being run under the Gupta Education Trust. Petitioner therefore asserts that Gupta Education Trust is a charitable trust and is offering PU courses in Commerce and Science and degree courses in B.Com and B.BA disciplines and PG course in M.Com. The building where this institution is running the courses is used for educational purpose and no commercial activities are undertaken in the said building.

The petitioner, an educational institution, is aggrieved by the imposition of advertisement tax as reflected in the demand notices issued by the respondent, produced at Annexures-B and C and the consequential orders passed thereon, at Annexures-D and D1. The petitioner has challenged the said orders on the ground that it is a charitable and non-commercial institution, not engaged in any form of commercial advertising as contemplated under the relevant taxing provisions. It is contended that the levy of advertisement tax on such an institution is ultra vires, amounts to an unreasonable fiscal burden, and is not envisaged under the statutory scheme of the Act.

3. Petitioner's counsel reiterating the grounds has vehemently argued that tax demand is without jurisdiction, misconceived and violative of Article 14 and 19(1)(g) of the Constitution of India. It is urged that petitioner is a non-profit institution engaged in charitable activity and this signage displayed is purely informative and devoid of any commercial content. Therefore, petitioner's counsel would submit that the same does not fall within the definition of "advertisement" under the BBMP Advertisement Bye-laws 2006.

4. Per contra, the learned counsel appearing for the respondent-Corporation has opposed the petition and refuted the contentions urged by the petitioner. He submits that the impugned orders are legally sustainable, having been passed in accordance with law. Placing reliance on Section 134 of the Act, he contends that the Corporation is duly empowered to levy tax on advertisements, including signage and hoardings. He further submits that the petitioner-institution had erected hoardings and display boards without obtaining prior permission from the Corporation, and therefore, the levy of advertisement tax is justified and in consonance with the statutory provisions.

5. Heard learned counsel for the petitioner and learned standing counsel for the respondents. Perused the records.

6. Before proceeding to examine the merits of the case, this Court finds it appropriate to refer to the relevant statutory provisions that bear significance to the issue raised in the present petition. The provision that warrants consideration is Rule 2A(1) of the BBMP Advertisement Bye-laws , 2006, which defines the term "Adver