Selvel Media Services Private Limited Vs. State Of UP

Heard Sri W.H. Khan, Senior counsel assisted by Sri Javed Husain Khan, learned counsel for the petitioners, learned Standing counsel for the State of U.P., and Sri Alok Mishra, learned counsel for Kanpur Nagar Nigam. The petitioners, who are all advertising companies, have come forward with this writ petition aggrieved by the demand of advertisement tax imposed by the Nagar Nigam, Kanpur, on displaying advertisements through hoardings within its jurisdiction. The crux of the challenge lies in the realization of advertisement tax from 1.7.2017, which the petitioners argue is illegitimate on the ground that the provision to levy advertisement tax has been deleted following the enforcement of the U.P. Goods and Service Tax, 2017. They contend that with the advent of this new tax regime, no advertisement tax can be levied. The petitioners emphasize that this imposition is contrary to the law since the provision for levying advertisement tax was effectively nullified by the legislative changes brought about by the introduction of the U.P. Goods and Service Tax Act, 2017.

It is not disputed that, prior to this change, the Nagar Nigam Kanpur had framed the U.P. Municipal Corporation (Assessment and Collection of Tax on Advertisement) Rules, 2009. However, these rules were struck down by the Lucknow Bench of the Allahabad High Court in the case of Anurag Bansal Vs. State of U.P. & others 2011 (5) ADJ (LB) (FB). In the wake of this judgment, Kanpur Nagar Nigam proceeded to formulate another set of rules intended for levying advertisement tax, known as the Kanpur Nagar Nigam (Vigyapan Kar Ka Nirdharan Aur Wasuli Viniyam) Upvidhi, 2016, which were enforced from 2.4.2016. Despite these efforts, the said bye-laws did not withstand judicial scrutiny and were also struck down by a judgment and order dated 4.5.2017 in writ petition no. 9389 of 2017.

In light of these judicial pronouncements, it becomes evident that post-4.5.2017, there have been no further rules or bye-laws made and enforced by the Nagar Nigam, Kanpur, for the purposes of levying advertisement tax. Despite this legal backdrop, the petitioners have been subjected to demands for advertisement tax, which they argue is baseless and contrary to the provisions of the new tax regime under the U.P. Goods and Service Tax Act, 2017. The petitioners assert that the continued demand for advertisement tax by the Nagar Nigam, Kanpur, is not only unlawful but also constitutes a clear violation of their rights, as there exists no legal framework or statutory authority that legitimizes such demands post the introduction of the new tax regime.

The learned counsel for the petitioners strongly submits that the demands raised against them are devoid of any legal foundation and are in stark violation of the principles of natural justice. They argue that the Nagar Nigam, Kanpur, has failed to recognize the legal transition to the Goods and Services Tax (GST) regime, which subsumes various indirect taxes, including advertisement tax. By continuing to demand advertisement tax, the Nagar Nigam, Kanpur, is acting beyond its jurisdiction and in defiance of the established legal norms post-implementation of the GST.

Given these circumstances, the petitioners seek a declaration that any demand for advertisement tax post-1.7.2017 by the Nagar Nigam, Kanpur, is illegal, void, and unenforceable. They request that this Hon’ble Court quash the impugned demands and direct the respondents to refrain from levying or collecting advertisement tax in the absence of any statutory provision authorizing such action. The petitioners further pray for appropriate reliefs that this Court may deem fit in the interest of justice, to ensure that their rights are protected and the unlawful demands are nullified.