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2019 Supreme(All) 248
ALLAHABAD HIGH COURT
PANKAJ MITHAL, PANKAJ BHATIA, JJ.
PANKAJ ADVERTISING PROP THROUGH ITS PROP - Appellant
Versus
STATE OF UP AND OTHERS - Respondent
Writ Tax No. 577 of 2018
Decided on : 08-02-2019
Advocate Appeared:
C.K. Parekh, Adv., Vikas Rastogi, Adv., Sahab Tiwari, Adv., Saurabh Tiwari, Adv.
Headnote:
Constitution of India, 1950 – Article 226 – Seeking to declare Nagar Palika Parishad Hathras Upvidhi, 2015 as ultra-vires of provisions of Uttar Pradesh Goods and Service Tax Act, 2017 – U.P. Municipalities Act, 1916 – Articles 14, 19, 21, 246 – Amendment of Schedule – Provisions under Challenged – Held, Nagar Palika Parishad had no legislative competence on 19.08.2017 to promulgate bye-laws in view of omission of Section 128(2)(vii) of Municipalities Act by virtue of Section 173 of G.S.T. which was enforced on 01.07.2017 as also due to omission of Entry 55 of List II of 7th Schedule to Constitution of India empowering State to make bye-laws in respect of tax on advertisement Section 17 of Constitution (101st amendment) 2016 enforced – Accordingly, aforesaid bye-laws are struck down as ultra-vires – Mere framing of said bye-laws prior to omission of Sub-section 2(vii) of Section 128 of Municipalities Act would not bring said bye-laws within legislative competence as on effective date statutory provision enabling imposition of advertisement tax stood already deleted – Even otherwise, mere framing of bye-laws is not enough unless they see light of the day which they saw for the first time on publication in the gazette by which time power to impose tax on advertisement was withdrawn – Accordingly, when State was denuded of power to make laws in respect of tax on advertisement obviously municipalities also were divested of power to impose any tax on advertisement.
Facts of the Case:
Present writ petition has been filed seeking to declare the Nagar Palika Parishad Hathras (Vigyapan Kar Ka Nirdharan Aur Wasuli Viniyaman) Upvidhi, 2015 as ultra-vires of the provisions of Uttar Pradesh Goods and Service Tax Act, 2017; U.P. Municipalities Act, 1916 and Articles 14, 19, 21, 246, Seventh Schedule, List-II (State List - Entry-55 which has been amended and omitted by 101 Amendment w.e.f. 16.9.2016) and 265 of the Constitution of India
Findings of the Case:
Nagar Palika Parishad had no legislative competence on 19.08.2017 to promulgate bye-laws in view of omission of Section 128(2)(vii) of Municipalities Act by virtue of Section 173 of G.S.T. which was enforced on 01.07.2017 as also due to omission of Entry 55 of List II of 7th Schedule to Constitution of India empowering State to make bye-laws in respect of tax on advertisement Section 17 of Constitution (101st amendment) 2016 enforced – Accordingly, aforesaid bye-laws are struck down as ultra-vires – Mere framing of said bye-laws prior to omission of Sub-section 2(vii) of Section 128 of Municipalities Act would not bring said bye-laws within legislative competence as on effective date statutory provision enabling imposition of advertisement tax stood already deleted – Even otherwise, mere framing of bye-laws is not enough unless they see light of the day which they saw for the first time on publication in the gazette by which time power to impose tax on advertisement was withdrawn – Accordingly, when State was denuded of power to make laws in respect of tax on advertisement obviously municipalities also were divested of power to impose any tax on advertisement.
PANKAJ BHATIA, J.
1. Heard Sri C.K. Parekh, learned counsel for the petitioner, Sri Avinash Chandra Tripathi, learned Standing Counsel and Sri Sahab Tiwari, learned counsel appearing for Nagar Palika Parishad, Hathras, (respondent nos. 2, 3 and 4).
2. The present writ petition has been filed seeking to declare the Nagar Palika Parishad Hathras (Vigyapan Kar Ka Nirdharan Aur Wasuli Viniyaman) Upvidhi, 2015 as ultra-vires of the provisions of Uttar Pradesh Goods and Service Tax Act, 2017; U.P. Municipalities Act, 1916 and Articles 14, 19, 21, 246, Seventh Schedule, List-II (State List - Entry-55 which has been amended and omitted by 101 Amendment w.e.f. 16.9.2016) and 265 of the Constitution of India.
3. This Court had also called the Additional Advocate General to ascertain whether the State Government was desirous on opposing the petitions with regard to vires of the levy of Advertisement Tax by the municipalities, however, Sri Manish Goel, Additional Advocate General, State of U.P. appeared and fairly stated that he had nothing to add or submit unless there was a challenge to levy of Advertisement Tax under the U.P. GST.
4. Facts, in brief, in the present petition, are that the petitioner is an advertising firm based at Ghaziabad and started the work of advertising in the district Hathras. The petitioner had taken private properties, not belonging to the Nagar Palika Parishad at four places for putting hoardings on the roof of the said premises. However, in pursuance of the bye-laws framed by Nagar Palika Parishad, Hathras on 12.1.2017 and published on 19.8.2017, a demand of advertisement tax on Hoardings/Sign Boards/Glow Signs affixed at various places including on the private buildings was sought to be recovered from the petitioner.
5. The petitioner therefore challenged the legislative competence to the imposition, collection and realization of the Advertisement Tax under the U.P. Municipalities Act, 1916 alleging that when there is no provision to impose such a tax there can be no power to frame any bye-laws in that regard.
6. The issue relating to the power of the municipality to levy and collect Advertisement Tax has a chequered history. Prior to 2011, the municipalities in exercise of their powers under the U.P. Municipality Act 1916 sought to levy and recover Advertisement Tax, which was challenged before the High Court, Allahabad by means of Writ Petition No. 7848 of 2010 (M/B) Bharti Airtel Limited through its Authorised Signature vs. State of U.P. And others, the said petition came to be decided on 21.10.2010 wherein the Hon'ble Court held that the Nagar Palika Parishad and Nagar Panchayat have no authority to impose tax on the Hoardings/Sign Boards/Glow Signs. A similar view was taken by this Court in Writ Tax No. 2300 of 2009 (Idea Cellular Limited And Another vs. State of U.P. And Others) wherein this Court has held that levy, imposition and collection of Advertisement Tax by the Nagar Palika Parishads/Nagar Panchayats was wholly illegal and without any sanction of law.
7. The U.P. Municipalities Act 1916 was amended by U.P. Act No. 8 of 2011, published in the U.P. Gazette Extraordinary Part-1 Section (Ka) on 11.3.2011 whereby Section 128(2)(vii) was introduced giving the municipality the power to impose the advertisement tax. Section 128 after its amendment on 11.3.2001 is as under:
[128. Taxes to be imposed. - (1) Subject to the provisions of this Act and of Article 285 of the Constitution of India, a Municipality shall impose the following taxes, namely :-
(i) a tax on the annual value of buildings or lands or both.
(ii) a water tax on the annual value of buildings or lands or both;
(iii) a drainage tax on the annual value of buildings leviable on such buildings as are situated within a distance, to be fixed by rules in this behalf for each municipality from the rearest sewer line;
(iv) a conservancy tax for the collection, removal and disposal of excrementious and polluted matter from privies, urinals, cesspools
