TMI Blog2016 (8) TMI 1460X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the petitioner to pay advertisement tax as per the agreement and in case of failure, proceedings for removal of the advertisements and also for terminating the contract shall be initiated. In the case in hand, the Municipal Corporation issued notice for deposit of tax on advertisement. Such a notice cannot be said to be authorised, if read in consonance with the provisions of Sections, 123, 126 and 135 of the Act. As has already been noticed, in case there is violation by any person in erecting or displaying any advertisement, the only power conferred on the Commissioner is either to get it removed or remove the same. Even though Section 135 of the Act envisages issuance of a demand notice for recovery of the advertisement tax due on a prescribed form, however, no form, as such, was referred to. There is no procedure prescribed in the Act or the Rules regarding filing of returns, assessment of tax and consequently recovery thereof. The order, which has been impugned in the present petition, has not been passed in exercise of powers conferred under any of the provisions of the Act, Rules or by-laws framed thereunder, but it was in pursuance to the directions issued by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xes as specified in sub-sections (1) and (2) shall be levied at such rates as may, from time to time, be specified by the Government by notification and shall be assessed and collected in accordance with the provisions of the Act and the bye-laws made thereunder. Stress was laid regarding assessment and collection of the tax in accordance with the provisions of the Act and the bye-laws made thereunder claiming that there is no procedure provided for assessment and collection and no bye-laws have been framed. Sub-section (4) of Section 90 of the Act provides that even the Government may, by special or general order, direct a Corporation to impose any tax, as provided for in sub-section (1) thereof, if not already imposed. 5. Section 122 of the Act was referred to, which specifically deals with tax on advertisements. It provides that every person liable to pay tax under specified conditions shall pay the same calculated at such rate, as may be specified by the Government. Sub-section (2) thereof provides that tax leviable under this sub-section shall be payable in advance in such number of instalments and in such manner, as may be determined by the bye-laws made in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot. Merely because a right had been given in the concession agreement, the same would not mean that all the advertisements had been put in place. The tax could possibly be levied only if the advertisement was there and not merely on the basis that concession agreement enabled the petitioner to put those advertisements. Further, relying upon the judgments of Hon'ble the Supreme Court in Kunnathat Thathunni Moopil Nair etc. v. State of Kerala and another, AIR 1961 SC 552; State of A. P. v. Nalla Raja Reddy and others, AIR 1967 SC 1458 and Commissioner, Central Excise and Customs, Kerala v. M/s Larsen Toubro Ltd., AIR 2015 SC 3600, it was submitted that the demand being confiscatory in the absence of machinery provisions, the same deserves to be set aside. 10. Still further, it was submitted that reference to the provisions of Sections 146 and 147 of the Act by the respondents in the reply is totally misplaced, as there is no assessment of tax, for which the provisions will apply. The provisions of Municipal Account Code, 1930 are also of no relevance as it talks of maintenance of record and does not prescribe any procedure for assessment. 11. Rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax, whereas Section 147 of the Act provides for precondition for entertainment of appeal. It was submitted that complete machinery has been provided under the Act for levy, the person liable to pay tax, incidence of tax and rate of tax. Further procedure for assessment, demand notice, recovery and penalty have also been provided, hence, the contention that there are no machinery provisions is totally misconceived. In support of the plea, reliance was placed upon the judgment of this court in Brij Mohan Gupta v. State of Haryana and another, 2015(4) RCR (Civil) 318. 13. Heard learned counsel for the parties and perused the paper book. 14. The relevant provisions of the Act are reproduced hereunder: 2. Definitions- In this Act, unless the context otherwise requires,- xx xx xx (4) ''bye-law'' means a bye-law made under this Act, by notification in the Official Gazette; xx xx xx 90. Taxe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... name of the owner or occupier of such land or building; or (e) relates to the business of a railway administration and is exhibited within any railway station or upon any wall or other property of a railway administration; or (f) relates to any activity of the Government or Union of India or the Corporation. (2) The tax on any advertisement leviable under this section shall be payable in advance in such number of instalments and in such manner as may be determined by bye-laws made in this behalf. 123. Prohibition of advertisements without written permission of Commissioner- (1) No advertisement shall be erected, exhibited, fixed or retained upon or over any land, building, wall, boarding, frame, post or structure or upon in any vehicle or shall be displayed in any manner whatsoever in any place within the City without the written permission of the Commissioner granted in accordance with bye-laws made under this Act. (2) The Commissioner shall not grant such permission, if- (a) the advertisement contravenes any bye-law made under this Act; or (b) the tax, if any, due in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the person on whom the notice is served and shall be included in the costs of recovery. xx xx xx 138. Manner of recovering tax.-- Any sum due on account of tax payable under this Act may be recovered, together with costs of recovery, through the following processes by the Competent Authority,- (a) by service of writ of demand on the defaulter; (b) by distraint and sale of a defaulter's movable property; (c) by the attachment and sale of defaulter's immovable property; (d) in the case of octroi and toll, by the seizure and sale of goods and vehicles; and (e) in the case of taxes on land and buildings, by the attachment of rent due in respect of the property or any other property owned by the defaulter. xx xx xx 146. Appeal against assessment, etc.- (1) An appeal against the levy or assessment of any tax, other than tax on building and land under this Act shall lie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot preferring the appeal within that period. (b) the amount, if any, in dispute in the appeal has been deposited by the appellant in the office of the Corporation. 399. Powers to make bye-laws.- (1) Subject to the provisions of this Act the Corporation may in addition to any bye-laws which it is empowered to make by any other provision of this Act, make bye-laws to provide for all or any of the following matters, namely,-- A. Bye-laws relating to taxation; xx xx xx (7) the submission of returns by the persons liable to pay any tax under this Act; (8) any other matter relating to the levy, assessment, collection, refund or remission of taxes under this Act: xx xx xx 15. As per the scheme of the Act, especially regarding taxation, Section 90(1)(d) of the Act enables the Corporation to levy tax on advertisements other than advertisements published in newspapers. Subsection (3) thereof provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he person liable to pay the same in prescribed form. Nothing from the Act or the Rules has been referred to show that any form has been prescribed for issuing such notice. 20. Section 138 of the Act provides for the manner of recovery of taxes. 21. Section 146 of the Act provides for appeal against the levy or assessment of any tax other than the tax on building and land, whereas Section 147 of the Act provides for condition for entertainment of appeal. 22. Even though Section 399 of the Act enables the Corporation to frame bye-laws, which includes the bye-laws relating to taxation regarding submission of returns, levy, assessment, collection, refund or remission, no Rules were referred at the time of hearing, which may have been framed for the purpose of levy, assessment and collection of tax leviable. 23. The concession agreement was executed between the Company and the petitioner for design, finance, construction, maintenance and transfer of bus shelters on DBMT basis for City Bus Service. The Company has been incorporated through equity contribution by Municipal Corporation and Punjab Infrastructure Development Boa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssibly be maintained. 25. The levy and recovery of tax in the absence of machinery provisions in a taxing statute has been considered by Hon'ble the Supreme Court from time to time. The issue was considered by Hon'ble the Supreme Court in Kunnathat Thathunni Moopil Nair's case (supra), wherein it was observed as under: 9. Ordinarily, a taxing statute lays down a regular machinery for making assessment of the tax proposed to be imposed by the statute. It lays down detailed procedure as to notice to the proposed assessee to make a return in respect of property proposed to be taxed, prescribes the authority and the procedure for hearing any objections to the liability for taxation or as to the extent of the tax proposed to be levied, and finally, as to the right to challenge the regularity of assessment made, by recourse to proceedings in a higher civil court. The Act merely declares the competence of the Government to make a provisional assessment, and by virtue of Section 3 of the Madras Revenue Recovery Act, 1864, the landholders may be liable to pay the tax. The Act being silent as to the machinery and procedure to be followed in maki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be such as may justify the Court taking the view that in substance the taxing statute is a cloak adopted by the legislature for achieving its confiscatory purpose. 28. In State of A.P. v. Nalla Raja Reddy, AIR 1967 SC 1458, Hon'ble the Supreme Court was examining the constitutional validity of the Andhra Pradesh Land Revenue (Additional Assessment) and Cess Revision Act, 1962 (22 of 1962) as amended by the Amendment Act (23 of 1962). Noticing the absence of machinery provisions in the impugned enactments, it was observed as under: 22. if Section 6 is put aside, there is absolutely no provision in the Act prescribing the mode of assessment. Sections 3 and 4 are charging sections and they say in effect that a person will have to pay an additional assessment per acre in respect of both dry and wet lands. They do not lay down how the assessment should be levied. No notice has been prescribed, no opportunity is given to the person to question the assessment on his land. There is no procedure for him to agitate the correctness of the classification made by placing his land in a particular class with reference to ayacut, acreage or even taram. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner is a company in which the Corporation itself holds majority shares. It had granted permission for display of advertisements. Initially, the letter was sent to the petitioner requiring it to pay the advertisement tax from the date of agreement within 7 working days and also furnish the details of advertisements displayed and the location thereof. The aforesaid letter is stated to be 5.1.2015. As the document has been placed on record, it was not signed by any one. It was replied to by the petitioner vide letter dated 13.1.2015, to which the Assistant Commissioner(s), Municipal Corporation, Ludhiana, vide letter dated 22.1.2015 responded by stating that it was the duty of the petitioner to pay advertisement tax as per the agreement and in case of failure, proceedings for removal of the advertisements and also for terminating the contract shall be initiated. It was followed by another letter dated 8.4.2015 from the Assistant Commissioner(s), Municipal Corporation requiring the petitioner to deposit the amount of tax mentioned in the notice. On failure, proceedings for removal of advertisement and for terminating the contract were to be initiated. There is another notice dated 17. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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