The distinction between an informative sign and an advertisement depends on the intent to solicit customers, with taxes upheld for displays deemed to promote sales.

ORDER:

1. The present Writ Petition is filed questioning the action of the Respondent No.3 in issuing Notice No.73, dated 01.03.2018 insisting the Petitioner to pay advertisement tax/charges for the name boards/hoardings erected on the premises of the Petitioner, as illegal and arbitrary.

2. The facts leading to filing of the Writ Petition are as follows:-

The Petitioner is involved in the business of sale of electronic products and is running his business at various locations in the State. While so, a demand notice was issued to the Petitioner calling upon the Petitioner to pay Rs.16,57,588/- towards advertisement tax for the period from 01.10.2016 to 31.03.2018 for the advertisement displayed by the Petitioner by way of hoardings/boards. It is stated that the hoardings/advertisements were erected by the Petitioner in their own premises and therefore the same cannot be termed to be ‘advertisement’, but it is only an information to the general public about the location of the showroom/shop. It was also contended that the Respondent authority has no power to levy the tax under Sections

420 and 421 of the Andhra Pradesh Municipal Corporations Act, 1955 .

3. No Counter Affidavit has been filed by the Respondent authorities.

4. The learned Standing Counsel appearing for the Respondent- Corporation would contend that the power to levy the advertisement tax emanates from Section 197(1)(i)(f) of the Andhra Pradesh Municipal Corporation Act, 1955 as was in vogue at the relevant point of time and submits that the photograph filed along with the Writ Petition would show that the hoarding is as big as showroom and the same cannot be equated to signboards and therefore the hoardings amount to advertisement for which tax could be levied.

5. Having heard the respective counsels, this Court reasons as follows:-

The right to levy advertisement tax emanates from Section

197(1)(i)(f) of the Andhra Pradesh Municipal Corporation Act, 1955 as it was existing then. Subsequently, sub-section (f) of Section 197(1)(i) was omitted from the statute vide Act 9 of 2020 dated 03.01.2020.

However, the period in question is anterior to 03.01.2020.

6. The question as to whether a signboard/hoarding would attract advertisement tax or not, depends on the intent to solicit customers or merely providing information about the location of the shops.

The signboards merely showing the name of the shop per se cannot be amount to advertisement, but only an information to the customer regarding the location of the showroom/shop. However, if the signboards so displayed are with an intent to promote a particular product or goods or services with an intent to attract customers to purchase goods in the shop, it would amount to advertisement. The hoarding shown in the photograph filed along with the Writ Petition is independent of the signboard and the hoarding shows various products that are being offered for sale in the said shop.

7. The Hon’ble Supreme Court in ICICI Bank and another v. Municipal Corporation of Greater Bombay , [2005 (6) SCC 404] explained as to what amounts to an advertisement. After referring to the dictionary meaning of the term “advertisement” held at Paragraph 15 that advertisement is a matter that draws the attention of the public intended for potential customers. The Paragraph 15 thereof reads as under;

"15. An advertisement is a matter that draws attention of the public or segment of public to a product, service, person, organisation or line of conduct in a manner calculated to promote or oppose directly or indirectly that