M/S D.M. Advertisers Agency And 7 Others vs. Sri. Ajeet Kumar Singh, Joint Municipal Commissioner

Held

The Court held that the Mathura Vrindavan Nagar Nigam (Vigyapan Kar Ka Nirdharan and Wasuli Viniyaman) Upvidhi, 2017, was ultra-vires. The reasoning was twofold: firstly, Entry 55 of List II of the VIIth Schedule to the Constitution, which empowered the State Government to make bye-laws in respect of tax on advertisement, stood deleted by Section 17 of the Constitution (101st Amendment) Act, 2016, effective September 16, 2016. Secondly, Section 172(2)(h) of the U.P. Municipal Corporation Act, which authorized the framing of bye-laws concerning advertisement tax, was omitted by virtue of Section 173 of the U.P. GST Act, effective July 1, 2017. Consequently, on the relevant date (January 6, 2018), the Municipal Corporation lacked the necessary legislative competence to make and promulgate the said bye-laws. The Court struck down the bye-laws as ultra-vires. The original writ petition was allowed. In the contempt application, the Court noted that a fresh cause of action had arisen based on the order dated November 1, 2019, and if the order dated November 1, 2019, was being flouted, the applicants would be at liberty to invoke the remedy available in law. The contempt application was disposed of accordingly.

Facts

The applicants, M/s D.M. Advertisers Agency and 7 others, filed a contempt application against Sri Ajeet Kumar Singh, Joint Municipal Commissioner, for wilful defiance of a Division Bench order dated February 14, 2019. This order, passed in Writ (Tax) Petition No. 562 of 2018, had declared the Mathura Vrindavan Nagar Nigam (Vigyapan Kar Ka Nirdharan and Wasuli Viniyaman) Upvidhi, 2017, ultra-vires. The original writ petition challenged these bye-laws as being beyond the authority of the Municipal Corporation, citing the deletion of Section 172(2)(h) of the U.P. Municipal Corporation Act, 1959, by the U.P. GST Act, 2017, and the deletion of Entry 55 of List II of the VIIth Schedule of the Constitution by the Constitution (101st Amendment) Act, 2016. The contempt application was filed because the respondents allegedly continued to defy the order striking down the bye-laws. However, during the contempt proceedings, the opposite parties presented an order dated November 1, 2019, from Writ-C No. 35210 of 2019, which indicated a fresh cause of action had arisen.

Key Issues

1. Whether the Mathura Vrindavan Nagar Nigam (Vigyapan Kar Ka Nirdharan and Wasuli Viniyaman) Upvidhi, 2017, is ultra-vires to the provisions of the U.P. Municipal Corporation Act, 1959, the Central GST Act, the U.P. GST Act, and Articles 14 and 19 of the Constitution of India. 2. Whether the Municipal Corporation had the legislative competence to impose advertisement tax under the said bye-laws on January 6, 2018. Petitioner's Arguments: The petitioners argued that the bye-laws were notified and enforced on January 6, 2018, but on that date, the Municipal Corporation lacked the authority to impose advertisement tax. They contended that Section 172(2)(h) of the U.P. Municipal Corporation Act, which enabled the imposition of advertisement tax, was deleted effective July 1, 2017, by Section 173 of the U.P. GST Act. Furthermore, they argued that the State's power to legislate on advertisement tax under Entry 55 of List II of the VIIth Schedule of the Constitution was deleted effective September 12, 2016, by the Constitution (101st Amendment) Act, 2016. They relied on Article 265 of the Constitution, which mandates that no tax shall be levied except by authority of law. They also cited a similar judgment by a Division Bench of the same High Court in Writ Tax No. 577 of 2018 (M/s. Pankaj Advertising Vs. State of U.P., and 7 others) which declared bye-laws of Nagar Palika Parisad, Hathras, ultra-vires on similar grounds. Revenue/State's Arguments: The judgment records that the Additional Advocate General chose not to add anything to the submissions made by the counsel for the Mathura Vrindavan Nagar Nigam. The counsel for the opposite parties in the contempt application submitted that a fresh cause of action had arisen based on an order dated November 1, 2019, in Writ-C No. 35210 of 2019, and therefore, the contempt application was liable to be dismissed.