Add World Indoor - Outdoor Advertising Solutions vs. State Of U.P. And 5 Others

Held

The Court allowed the writ petitions, holding that the Vigyapan Niyamawali, 2013, is ultra-vires. The reasoning was based on prior decisions of the Court in similar matters. Specifically, the Court referred to its judgments dated February 8, 2019, in Writ Tax No. 577 of 2018 (M/s. Pankaj Advertising Vs. State of U.P. and 7 others) and February 14, 2019, in Writ Tax No. 562 of 2018 (M/s. DM Advertisers Agency through its Managing Partner and 7 others). These prior decisions had declared similar provisions of Nagar Palika Parisad, Hathras, and Mathura Vrindavan Nagar Nigam to be ultra-vires. The basis for these declarations was the deletion of Entry 55 of List II of Schedule VII to the Constitution of India, which empowered the State Government to make bye-laws regarding advertisement tax, and the deletion of Section 128(2)(vii) of the U.P. Municipalities Act and Section 172(2)(h) of the U.P. Municipal Corporation Act, which authorized the framing of bye-laws for advertisement tax. These deletions rendered the State Government incompetent to frame and enforce bye-laws for levying and collecting advertisement tax subsequent to September 16, 2016, and July 1, 2017, respectively. Consequently, the impugned recovery proceedings were quashed.

Facts

The petitioners, advertising companies, are challenging recovery proceedings initiated against them for advertisement tax. They contend that the Vigyapan Niyamawali, 2013, which forms the basis for these recoveries, is ultra-vires. The petitioners argue that the U.P. Municipal Corporation lacked the legal authority to impose advertisement tax on the relevant dates. Specifically, they point to the deletion of Section 172(2)(h) of the U.P. Municipal Corporation Act, 1959, effective from July 1, 2017, by Section 173 of the U.P. GST Act. Furthermore, they argue that the State's power to legislate on advertisement tax under Entry 55 of List-II of the VIIth Schedule of the Constitution of India was deleted effective September 12, 2016, by the Constitution (101st Amendment) Act, 2016.

Key Issues

1. Whether the Vigyapan Niyamawali, 2013, and the imposition of advertisement tax thereunder, are ultra-vires the Constitution and relevant statutes, particularly in light of the deletion of Entry 55 of List-II of the VIIth Schedule of the Constitution of India and Section 172(2)(h) of the U.P. Municipal Corporation Act, 1959. The petitioner argued that the U.P. Municipal Corporation had no authority to impose advertisement tax on the relevant dates. They relied on the deletion of Section 172(2)(h) of the U.P. Municipal Corporation Act, 1959, effective July 1, 2017, by Section 173 of the U.P. GST Act. They also contended that the State's legislative power under Entry 55 of List-II of the VIIth Schedule of the Constitution of India was deleted effective September 12, 2016, by the Constitution (101st Amendment) Act, 2016. The revenue or State did not record any specific arguments against these contentions in the judgment.