Petitioner | Hubballi Dharwad Advertisers Association (R) |
Respondent | State of Karnataka |
Decision by | Karnataka High Court |
Date of order or Judgement | 21-April-2022 |
Citation no. | 2022 (4) GSTPanacea 47 HC Karnataka Writ Petition No. 104172 of 2021 (LB-TAX) |
Hon’ble Judge | Justice Suraj Govindaraj |
Decision | In Favour of Revenue |
Power to Levy GST & Advertisement Fee-No conflict between the power to levy GST under GST Act and power of Municipal Corporation to levy advertisement fee or advertisement tax under Section 134 of the Karnataka Municipal Corporations Act.
Power to Levy GST & Advertisement Fee-Facts of the Case
Power to Levy GST & Advertisement Fee-The petitioners are in the business of advertisement through hoardings licensed by Hubballi Dharwad Mahanagar Palike (one of the respondents), and are registered dealers under Section 22 of the Karnataka Value Added Tax Act.
The petitioners are duly discharging their liability of advertisement tax despite which a notice dated 01.12.2014 asking petitioners to deposit advertisement tax regarding hoardings used by them.
Argument Before Court
Power to Levy GST & Advertisement Fee-Petitioner’s Contention
Power to Levy GST & Advertisement Fee-It was contended on the behalf of the petitioners that after the enactment of GST Act, the power/authority of respondents to levy or collect advertisement tax is ousted.
Therefore, there could be no demand for advertisement tax post the enactment of the GST Act.
The advertisement tax has been collected in terms of Section 134 of the Karnataka Municipal Corporations Act, 1976.
Further, this said provision is been deleted. Thus, the said power is divested and the respondents do not have jurisdiction or authority to levy advertisement tax.
That if the petitioner is charged GST and Advertisement Tax both, it would amount to double taxation.
Further, relies upon the decision of Allahabad High Court in M/s Selvel Media Services Private Limited and Others vs. State of U.P. and Others – Writ Tax No. 354/2018 Wherein it was held that ‘In terms of Section 173 of UPGST Act, the power of legislature to legislate with regard to advertisement tax had been deleted from Municipal Corporation Act’.
Relying on the said decision he submits that revenue also does not have any such power and therefore the demand is required to be quashed.
Power to Levy GST & Advertisement Fee-Respondent’s Argument
Power to Levy GST & Advertisement Fee-Counsel appearing for respondent submitted that the power to collect advertisement tax under Section 134 of the KMC Act continues as the deletion held in the decision relied upon by the petitioners, has not occurred in the KMC Act.
That relying on the decision of Gujarat High Court in Selvel Media Services Private Limited vs. The Municipal Corporation – it was submitted that advertisement tax is more in the nature of fee though it has been termed as tax.
This fee is levied for the license granted to the petitioner for exhibiting advertisements on the hoardings on the land belonging to the respondents, and has to do nothing with GST as contended by the petitioners.
That the respondents are authorized to levy and collect advertisement tax and if the petitioners are aggrieved with the levy of GST, they have to challenge the same. Thus, prayed for dismissing the writ petition.
Karnataka High Court Held
Power to Levy GST & Advertisement Fee-The Hon’ble High Court held that GST was introduced with the intention to simplify the process of collecting indirect taxes and all indirect taxes like excise duty, sales tax, service tax, have been subsumed in the GST Act.
That considering the argument on behalf of the petitioner that ‘paying advertisement tax would amount to double taxation’ found that the petitioners have not been able to show any details of payment of GST as it was not paid.
Transaction with HDMC is with respect to grant of license to the petitioners to put up hoardings on the land belonging to HDMC or to the private parties, and the incidence of GST has to do nothing with HDMC.
Incidence of tax on both the transactions are different.
Therefore, held that merely because GST may be charged on the Advertisement fee charged by HDMC, it cannot be said that there is double taxation.
The Hon’ble High Court with the above findings dismissed the writ petition declaring that there is no conflict between the power to levy GST under GST Act and power of Municipal Corporation to levy advertisement fee or advertisement tax under Section 134 of the Karnataka Municipal Corporations Act.
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Hubballi Dharwad Advertisers Association (R)
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