Pankaj Advertising Vs. State Of UP

Heard Sri C.K. Parekh, learned counsel for the petitioner, Sri Avinash Chandra Tripathi, learned Standing Counsel, and Sri Sahab Tiwari, learned counsel appearing for Nagar Palika Parishad, Hathras, (respondent nos. 2, 3, and 4). The present writ petition has been filed seeking to declare the Nagar Palika Parishad Hathras (Vigyapan Kar Ka Nirdharan Aur Wasuli Viniyaman) Upvidhi, 2015 as ultra-vires of the provisions of the Uttar Pradesh Goods and Service Tax Act, 2017; U.P. Municipalities Act, 1916; and Articles 14, 19, 21, 246, Seventh Schedule, List-II (State List – Entry-55 which has been amended and omitted by the 101st Amendment w.e.f. 16.9.2016) and 265 of the Constitution of India. This Court had also called the Additional Advocate General to ascertain whether the State Government was desirous of opposing the petitions with regard to the vires of the levy of Advertisement Tax by the municipalities. However, Sri Manish Goel, Additional Advocate General, State of U.P., appeared and fairly stated that he had nothing to add or submit unless there was a challenge to the levy of Advertisement Tax under the U.P. GST Act. The petitioner argued that the Nagar Palika Parishad Hathras had continued to levy advertisement tax despite the abolition of the relevant provision under Section 172 (2) (h) of the Municipal Corporation Act, 1916 by Section 173 of the U.P. GST Act with effect from 1.7.2017. Furthermore, the power of the State Government to legislate on advertisement tax, as provided under Entry 55 of List II of the VII Schedule of the Constitution of India, was deleted by the 101st Amendment to the Constitution with effect from 16.9.2016. Article 265 of the Constitution mandates that no tax shall be levied or collected except by the authority of law. Therefore, the authority to levy any tax, including advertisement tax, must be derived from statutes. Since the power of the State legislature to legislate on advertisement tax was removed, there was no longer any basis for the Nagar Palika Parishad Hathras to continue imposing this tax. The petitioner further contended that the continued imposition and collection of advertisement tax by the Nagar Palika Parishad Hathras was illegal and unconstitutional. The writ petition sought a declaration that the 2015 regulations were ultra-vires and beyond the powers conferred by the relevant statutory and constitutional provisions. The Court was called upon to examine whether the Nagar Palika Parishad Hathras had any legal authority to impose advertisement tax post-abolition of the statutory provisions under the U.P. GST Act and the 101st Constitutional Amendment. The petitioner highlighted that the principle of natural justice had been violated, as the continued imposition of advertisement tax was without proper statutory backing and contrary to constitutional mandates. The respondents argued that the Nagar Palika Parishad Hathras had the authority to impose the tax based on existing regulations, but the petitioner insisted that any such regulations were null and void after the relevant statutory and constitutional provisions were amended. The Court needed to determine whether the levy of advertisement tax by the Nagar Palika Parishad Hathras after the abolition of the enabling provisions was legally sustainable and whether the 2015 regulations were ultra-vires in light of the amended statutory and constitutional framework. The outcome of the writ petition would have significant implications for the authority of municipal bodies in Uttar Pradesh to impose and collect advertisement taxes in the absence of specific statutory provisions authorizing such levies.