Distinction between signage for information and advertisement tax liability established under the Andhra Pradesh Municipal Corporation Act.

ORDER

The present Writ Petition is filed questioning the action of the Respondent in issuing the impugned Notice vide Roc.No.2510/2006/G1, dated 18.03.2013 issued under Section 420 and 421 of A.P.Municipalities Act, calling upon the Petitioner to pay Advertisement Tax.

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

The Petitioner Company established a Vodafone Store at P.M.R Enclave, Tilak Road, Opposite Municipal Office, Tirupati. While so, the Respondent issued impugned Notice dated 18.03.2013 demanding the Advertisement Tax. Hence, the present Writ Petition came to be filed.

3. Heard Mr. Saripudi Raja Mouli, learned counsel, representing Mr.

Ganta Rama Rao, learned counsel for the Petitioner and learned Standing Counsel for the Respondent.

4. Learned counsel for the Petitioner would submit that the sign boards would not amount to advertisement, but only information to the prospective customers. Further, learned counsel for the Petitioner has also relied on a decision of this Court in “ National Insurance Co.Ltd. v. MCH , [2007(1) ALD 312] ” wherein a distinction has sought to be made advertisement and eliminated sign board and submits that the impugned notice, except display is mentioned is at the shop of the petitioner and same cannot be termed as advertisement. It is his further case that there is no mention of any quoting put up by the Petitioner and in the absence of any holding the impugned notice cannot be sustained.

5. Learned Standing Counsel for the Respondent would submit that there is no bar for imposing Advertisement Tax and as Municipal Corporation is empower to do so under Section 197 of A.P.Municipal Corporation Act. However, in the Counter-Affidavit, it is mentioned that there are two large Advertisement Boards near Municipal Corporation Officer of PMR Circle and therefore, the Petitioner is liable to pay Property Tax for the years 2011-12 and 2012-13. Though, this fact is explicitly mentioned in the notice, but no reply affidavit is filed by the Petitioner to that effect.

6. 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 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.

7. 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.

8. 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.

9. The Hon’ble Supreme Court in “ ICICI Bank and an