The main legal point established in the judgment is the interpretation of the provisions of the Kolkata Municipal Corporation Act, 1980, and the distinction between tax and fee, as well as the concept of quid pro quo in relation to the authority of the Corporation to levy fees for specific services rendered.

Debangsu Basak, J.

The petitioners have challenged the demand for licence and permission fees raised by the Kolkata Municipal Corporation authorities for the hoardings set up by the petitioners.

2. Learned Senior Advocate for the petitioner has submitted that, the petitioners, in its usual course of business, are required to set up hoardings for the purpose of advertisement of their product. The hoardings and glow signs of the petitioners are exempted from payment of advertisement tax under Section 204(2)(c) of the Kolkata Municipal Corporation Act, 1980. Learned Senior Advocate for the petitioners has relied upon AIR 2007 Cal 136 (Calcutta Soft Drinks Pvt. Ltd. v. Calcutta Municipal Corporation & Ors.) in this regard.

3. Learned Senior Advocate for the petitioners has referred to Sections 202 and 203 of the Kolkata Municipal Corporation Act, 1980 and submitted that, these two sections deal with permission fee and licence fee respectively. He has also referred to Section 204 of the Act of 1980. Referring to Section 131 of the Act of 1980 learned Advocate for the petitioners has submitted that, the same relates to annual budget of the Kolkata Municipal Corporation. He has submitted that, neither Section 202 nor Section 203 confers any power on the Kolkata Municipal Corporation to levy any fees on the hoardings and glow signs. He has referred to 2005 (4) SCC 245 (Calcutta Municipal Corporation & Ors. v. Shrey Mercantile (P) Ltd. & Ors.) and 2015 (13) SCC 748 (State of Tamil Nadu & Anr. v. TVL. South Indian Sugar Mills Association & Ors.) in support of such contentions. He has submitted that, imposition of tax without authority of law is violative of Article 265 of the Constitution of India. He has referred to the demands raised by the Corporation authorities and submitted that, the demands are on recurring basis and, therefore, they are to be treated as tax and not fees. Moreover, he has submitted that, the Act of 1980 does not authorize the Corporation authorities to levy a licence fee or a permission fee. He has relied upon 1992 (3) SCC 285 (Ahmedabad Urban Development Authority v. Sharadkumar Jayantimkumar Pasawalla & Ors.) in support of such contention.

4. Learned Senior Advocate for the petitioners has submitted that, the Corporation authorities are not rendering any service to the petitioners. The demand for permission fee or a licence fee, therefore, is void. He has referred to the affidavit-in-opposition filed by the Corporation authorities and submitted that, the Corporation authorities have not stated nor have demonstrated that, the Corporation authorities are rendering any service for them to demand a permission or a licence fee. He has prayed for quashing of the demands raised by the Corporation.

5. Learned Additional Advocate General appearing for the Corporation authorities has submitted that, the right to carry on business under Article 19 of the Constitution of India is subject to reasonable restrictions. The Corporation authorities are seeking to modulate the setting up of hoardings or glow signs in the general public interest. The Corporation authorities are responsible to look at the structural stability of a hoarding or a glow sign. They are also required to look into whether or not the hoardings or glow signs obstruct any public view or causes any traffic hazard. He has referred to the policy guidelines of the Corporation authorities and submitted that, the Corporation authorities are required to assess a hoarding or a glow sign to find out whether or not they are within the policy guidelines. He has relied upon AIR 1952 SC 196 (The State of Madras v. V.G. Row), AIR 1960 SC 430 (Narendra Kumar & Ors. v. The Union of India & Ors.) and AIR 1985 SC 660 (K. Ramanathan v. State of Tamil Nadu & Anr.) in support of the proposition that, restrictions would include a prohibition. On the aspect of the Corporation authorities being entitled to obtain licence fee, he has referred to AIR 1985 SC 61 (M/s. Samarias Tr