9911796707
TMI Blog2023 (1) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... NGADHARAPPA, ADVOCATE FOR R15; SRI. A. RAVISHANKAR, ADVOCATE FOR R16; SRI. S. MAHESH, ADVOCATE FOR R18; SRI. A. NAGARAJAPPA, ADVOCATE FOR R21; SRI. G.M. ANANDA, ADVOCATE FOR R23; SRI. GEETHADEVI M.P., ADVOCATE FOR R25; R7, R10, R11, R13, R17, R20, R22, R24, R26 SERVED) (BY SRI. A.V. ANGADHARAPPA, ADVOCATE FOR R1; SRI. J.N. NAVEEN, ADVOCATE FOR R3; SRI. RAVI. H.K., ADVOCATE FOR R4; SRI. VISHWANATH R. HEGDE, ADVOCATE FOR R5; SMT. M.C. NAGASHREE, AGA FOR R6; R2-SERVED) ORDER Since the above three writ petitions raised common question with regard to validity of the demand made by respondent authorities for payment of advertisement tax in respect of hoardings erected by the petitioners, they are taken up for analogous hearing and common disposal. 2. In W.P.No.9936/2019 the petitioner has sought the following reliefs: "i) Issue an appropriate Writ or order or direction by quashing the impugned notice No. SA.DAMAPA/KAMSHA/JAHI/33/2018-19/ & 24/18-19 respectively Dated: 26.06.2018 and 03.10.2018 to the petitioner directing him to pay certain amount issued by the Respondent vide Annexure -G & H respectively. ii) Issue a Writ of Mandamus directing the respondents not to meddle with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the business inter alia outdoor advertisements involving erecting hoardings, after obtaining necessary permissions from the landlords and also local authorities and thereafter display advertisement of their clients on such hoardings. Petitioners were required to pay advertisement tax in respect of the display of advertisements upon the demands that were raised by the respondent authorities. That in view of the amendment to the Constitution omitting entry No.55 in List II of Schedule VIII to the Constitution by its 101st amendment and consequent promulgation of Goods and Services Act, 2017 the States do not have authority to levy tax as was done prior to the constitutional amendment. However, despite the same the respondent authorities are continuing to raise demand for the payment of tax on advertisement without any authority constraining the petitioners to approach this court seeking reliefs as stated hereinabove. 4. It is the case of the petitioners that by way of constitution (one hundred and first amendment) Act, 2016, entry No.55 of List II of Schedule VIII to the Constitution which conferred power on the State to make law with respect to advertisement tax has been deleted a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a vires the Constitution in view of 101st amendment to the Constitution. (b) that the impugned provisions were enacted tracing their power to legislate which was available under entry No.55 of the List II in the 7th schedule of the Constitution which had conferred authority to legislate with regard to taxes on advertisement. That except the said power no other power or authority is available to the State to legislate on the matter of taxes on advertisement. (c) that apart from implementation of Goods and Services Tax (GST) across the country, the 101st amendment to the Constitution was enacted with the Parliament which received President assent on 08.09.2016, and as per Section 17(b)(3) of the said amendment Act entry No.55 in List II has been omitted which has come into effect on and from 16.09.2016. (d) that consequent to the aforesaid amendment the power to legislate on taxation on advertisements no longer exist with the State. However, the impugned provision continue to exist on the Statute Book which are being used and misused by the authorities demanding payment of tax on advertisement. (e) though consequent to the constitutional 101st amendment, the State has brought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Karnataka Municipalities and certain other laws (amendment Act) 2021 and a notification dated 07.10.2021 in this regard has been published in the official Gazette. The said amendment Act is intending to substitute the word "tax" with that of the word "fee" where ever found in the impugned provisions contained in the Karnataka Municipalities Act, 1964 and Karnataka Municipal Corporations Act, 1976. Thus, it is submitted that the present petitions does not survive for consideration. 8. Sri.Akshay B.M., learned counsel appearing for respondent in W.P.No.9936/2019 resisting the aforesaid writ petition and the relief sought therein contended that what is being demanded and charged by the respondent authorities is "fees" for the service being rendered by the respondent authorities and not "tax" as contended by the petitioners. Learned counsel for respondent relies upon the following authorities/judgments in support of his submissions: (1) Municipal Corporation of Delhi and others Vs Mohd. Yasin - AIR 1983 SC 617. (2) Union of India (UOI) and others Vs State of UP -AIR 2008 SC 521. 9. Sri.Gangadharappa, learned counsel appearing for one of the respondent-authorities submits that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lace whether public or private, shall pay on every advertisement which is so erected, exhibited, fixed, retained or displayed to public view, a tax calculated at such rates and in such manner and subject to such exemptions, as the corporation may, with the approval of the Government, by resolution determine: Provided always that the rates shall be subject to the maxima and minima laid down by the Government in this behalf: Provided further that no tax shall be levied under this section on any advertisement or a notice,- (a) of a public meeting, or corporation of the city, or (b) of an election to any legislative body, or (c) of a candidature in respect of such an election: Provided also that no such tax shall be levied on any advertisement which is not a sky-sign and which,- (a) is exhibited within the window of any building; or (b) relates to the trade or business carried on within the land or building upon or over which such advertisement is exhibited, or to any sale or letting of such land or building or any effects therein or to any sale, entertainment or meeting to be held upon or in such land or building; or (c) relates to the name of the land or building, upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; (a) For a space upto 5.sq.m 375 (b) For every additional 1.sq.m. or 75 4 Non-illuminated advertisement boards, carried by switch boardmen,- (a) For each board not exceeding 1 75 (b) For each board exceeding 1 sq.m. and upto 2.5. sq.m 150 (c) For each additional 1 sq.m. in area or less 75 5 Illuminated advertisement boards carried by switch boardmen,- (a) For each board not exceeding 1 150 (b) For each board exceeding 1 sq.m. and upto 2.5 sq.m. 250 (c) For each additional 1 sq.m. in area 150 6 Illuminated advertisements on land, building, wall or hoardings, frame, posts, structures, etc. (a) For a space upto 2. sq.m. 75 (b) For a space over 2. sq.m. and upto 5. sq.m. 150 (c) For a space over 5. sq.m. and utpo 2.5 sq.m 150 (d) For every additional 2.5 sq.m. or less 175 7 Advertisments exhibited on screens in cinema houses and other public places by means of lantern slides or similar devices,- (a) For a space upto 5. sq.m. 250 (b) For a space over 5. sq.m. and upto to 2.5 sq.m. 275 (c) For every additional 2.5 sq.m. or less 275 8 Non-illuminated advertisements suspended across streets,- (a) For a sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment relates to the trade, profession or business carried on in that building; or (b) relates to trade, profession or business carried on within the land or building upon or over which such advertisement is exhibited or to sale or letting of such land or building or any effects therein or any sale, entertainment or meeting to be held on or upon or in, the same; or (c) relates to the name of the land or building, upon or over which the advertisement is exhibited or to the name of the owner or occupier of such land or building; or (d) 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; (e) relates to any activity of the State Government; (f) relates to any public meeting". Section 133(1) "133. Prohibition of advertisements without written permission of municipal council.- (1) No advertisement shall, after the levy of the tax under section 94 has been determined upon by the municipal council, be exhibited, erected, fixed or retained upon or over any land, building, wall, hoarding, frame, post or structure or upon or in any vehicle or shall be displayed in any manne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal 1 sq. m. in area or less 15 5. Illuminated advertisement boards carried by sandwich boardmen,- (a) For each board not exceeding 1 sq. m. 30 (b) For each board exceeding 1 sq. m. and up to 2.5 sq. m. 50 (c) For each additional 1 sq. m. in area or less 30 6. Illuminated advertisements on land, building, wall or hoardings, frame, post, structures, etc,- (a) For a space up to .2 sq. m. 15 (b) For a space over .2 sq. m. and up to .5 30 (c) For a space over .5 sq. m. and up to 2.5 sq.m. 35 (d) For every additional 2.5 sq. m. or less 35 7. Advertisements exhibited on screens in cinema houses and other public places by means of lantern slides or similar devices,- (a) For a space up to .5 sq. m. 50 (b) For a space over .5 sq. m. and up to 2.5 sq. m. 55 (c) For every additional 2.5 sq. m. or less 55 8. Non-illuminated advertisements suspended across streets,- (a) For a space upto 1 sq. m. 10 (b) For a space over 1 sq. m. and up to 2.5 sq. m. 16 (c) For every additional 2.5 sq. m. or less 16 N.B.-The tax on item 8 will be in addition to the space which will be chargeable according to the scale to be determi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax namely: (a) ...... (b)..... (c)..... (d)..... (e) The tax on advertisement and/or any other tax levied by the concerned State under the erstwhile entry No.55 of List II (State List) of the 7th Schedule to the Constitution. 17. Thus, the aforesaid amendment to the Constitution omitting entry No.55 and consequent promulgation of the Goods and Services Tax (compensation to States) Act, 2017 the power of the State Legislature to levy tax on advertisement is withdrawn. 18. In an identical situation, the Division Bench of High Court of Allahabad in its Judgment dated 08.02.2019 rendered in the case of Pankaj Advertising Vs State of UP passed in Writ Tax No.577/2018 while striking down the bye laws as ultra vires held as under: "Apart from the above, the State Legislature was invested with power to make laws in respect of taxes and advertisement vide entry No.55 of List II to the 7th Schedule of the Constitution but the said entry was deleted by the constitution (101st amendment) Act, 2016 with effect from 12.09.2016. The said amending Act vide Section 17 amends 7th Schedule and provides for omission of entry No.55 of List II of the said Schedule. Thus, deleting the pow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vested with legislative power, including the power of levying taxes by the Constitution for the specific purposes, as in the case of District Committees and Regional Councils constituted under the aegis of the Sixth Schedule to the Constitution, the plenary power to legislate, especially in matters relating to revenue, still vests with the Union and the State Legislatures. Even if the submission that Municipalities now possess, under Part IX-A of the Constitution, a higher juridical status is correct, the extension of that logic to the proposition that they have plenary powers to levy taxes is not, as is clear from a perusal of the relevant part of Article 243-X of the Constitution which reads as under. "243-X. Power to impose taxes by, and Funds of, the Municipalities- The Legislature of a State may, by law- a) Authorise at Municipality to levy, collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such limits: (b)-(d) as may be specified in the law. 98. Article 243-ZB provides that this provision will be applicable to Union Territories and the reference to the legislature of a State would apply, in relation to a Un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declared invalid a taxing measure which was of doubtful validity, it is permissible for appropriate legislature to validate it by retrospective legislation. No legal fiction is involved in such a case. Mr.Subba Rao's submission has, therefore, to be rejected". 22. A Co-ordinate Bench of this Court in its judgment dated 04.08.2021 rendered in W.P.No.4601/2020 (LB-BBMP) connected with other matters dealing with the challenge to several imposts/fees imposed by the Bruhath Bangalore Mahanagara Palike and State of Karnataka at paragraphs 19 and 20 has held as under; "19. Before embarking upon the journey of consideration of impugned impose, I deem it appropriate to consider the position in law with regard to imposition of such imposts or a fee. 20. Article 265 of the Constitution is a source of power for the Union and States to impose taxes in accordance with law. Article 265 of the Constitution of India reads as follows; "265. Taxes not to be imposed save authority of law. - No tax shall be levied or collected except by authority of law" Therefore, any imposts can be made only in accordance with and as authorised by law". 23. Thus, from the above settled legal position an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o evenly balance the two. A broad correlation ship is all that is necessary. Quid pro quo in the strict sense is not the one and only true index of a fee; nor is it necessarily absent in a tax". 25. He also relies upon judgment of the Apex Court in the case of Union of India and others vs. State of UP, wherein referring to Article 285 of the Constitution at paragraph 9 the said judgment the Apex Court has held as under; "9. From a perusal of Article 285 it is clear that no property of the Union of India shall be subject to tax imposed by the State, save as Parliament may otherwise provide. The question is whether 'the charges for' supply of water and maintenance of sewerage is in the nature of a tax or a fee for the services rendered by the Jal Sansthan. There is a distinction between a tax and a fee, and hence one has to see the nature of the levy whether it is in the nature of tax or whether it is in the nature of fee for the services rendered by any instrumentality of the State like the Jal Sansthan. There is no two opinion in the matter that so far as supply of water and maintenance of sewerage is concerned, the Jal Sansthan is to maintain it and it is they who bear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the requirement of bringing in necessary amendment to the KMC Act and KM Act. 29. As rightly contended by learned Senior counsel for the petitioner that amendment to the Karnataka Gram Panchayath and Panchayath Swaraj Act has already been made vide Karnataka Gram Swaraj at Panchayath Raj (Amendment) Act 2017 as seen in the notification dated 12.07.2017 as per Annexure-R whereby provisions similar to Section 94 of KM Act and 103 of KMC Act that existed in Section 199(3) of the Karnataka Gram Swaraj and Panchayath Raj act, providing for levy of tax and advertisement the Panchayath has been omitted in view of omission of entry No.55 in List II of Schedule VII of the Constitution. 30. The aforesaid amendment made by the State Government to the Panchayath Raj Act has, as contended by the petitioner has lead to anomaly wherein the tax on advertisement is being levied and collected within the limits of Municipal corporation and Municipalities while no such levy is being made within the limits of Panchayaths. 31. It may not be out of context to mention that in the newly enacted Bruhat Bengaluru Mahanagara Palike Act, 2020 there is a conspicuous absence of provision providing for impos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lief for refund of the all amounts collected by the respondent authorities from the Members of the petitioner in W.P.No.15016/2019 towards advertisement tax is concerned, the tax collected on and after the 101st Amendment of the Constitution omitting the entry No.55 of List II to Schedule VII to the Constitution, the petitioner is at liberty to make a representation providing details of the amounts paid towards advertisement tax, in that event respondent-authorities may either refund the amounts so paid by the petitioner or give an endorsement to the petitioner to adjust and appropriate the said amount against other levies, if any, by the respondent authorities to be imposed on the petitioner in the State of Karnataka. The respondent-authorities if choose to adjust and appropriate the amounts already paid by the petitioner towards the advertisement tax, they shall give detailed break up of such adjustment and appropriation to the petitioner within a period of six weeks from the date of representation made by the petitioner. It is made clear that if there are no levies against which the amount paid could be adjusted or appropriated, the respondent-authorities shall refund the same t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
