Karnataka High Court
M/S Carzonrent India Pvt Ltd vs Bruhat Bangalore Mahanagara Palike on 30 June, 2022
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 30TH DAY OF JUNE, 2022
BEFORE
THE HON'BLE MR. JUSTICE R. NATARAJ
WRIT PETITION NO.55213/2013 (LB-BMP)
BETWEEN:
M/S CARZONRENT INDIA PVT. LTD.,
NO.12/10, 1ST FLOOR,
ABOVE VIJAYA BANK,
MSR MAIN ROAD,
GOKULA,
BANGALORE-560054.
REPRESENTED BY ITS AUTHORIZED SIGNATORY,
SRI. SHIVA SHARANAPPA
AGE - 40 YEARS.
...PETITIONER
(BY SRI. MOHAMAD TAHIR A., ADVOCATE)
AND:
1. BRUHAT BANGALORE MAHANAGARA PALIKE
N.R.SQUARE,
BANGALORE-560002.
REPRESENTED BY ITS COMMISSIONER
2. THE ADDITIONAL COMMISSIONER
ADVERTISEMENT DIVISION,
BBMP OFFICE,
N.R.SQUARE,
BANGALORE-560002.
...RESPONDENTS
(BY SRI. N.K.RAMESH, ADVOCATE FOR RESPONDENT NOS.1
AND 2)
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THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH
THE DEMAND NOTICES VIDE ANNEXURES-G, H AND N DATED
11.06.2012, 06.08.2012 AND 18.07.2013 ALL BEARING
REFERENCE NO.PR/464/12-13 RESPECTIVELY ISSUED BY
RESPONDENT NOS.1 AND 2 AND ETC.
THIS PETITION COMING ON FOR PRELIMINARY HEARING
IN 'B' GROUP THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
The petitioner, a Car Rental Company, has challenged the demand notices dated 11.07.2012, 06.08.2012 and 18.07.2013 issued by the respondent Nos.1 and 2, demanding advertisement tax from the petitioner. The petitioner has also sought for a declaration that the demand of Rs.500/- per application by the respondent Nos.1 and 2 is illegal, without the authority of law. It has also sought for a direction to the respondent Nos.1 and 2 not to impose the new rate of advertisement tax passed by it, by a resolution dated 03.03.2012 as the imposition of advertisement tax is not approved by the State Government.
2. The petitioner, which was operating City Taxi Services under the trade name "Easy Cabs", owned 600 3 vehicles. It claimed that in order to promote its business, it displayed advertisements such as its name, logo, contact number on the shell of the vehicles. It approached the Regional Transport Authority for permission to advertise on the shell of the vehicles operated by it. The petitioner was informed to pay a sum of Rs.1,000/- per vehicle per year. The petitioner restricted the request to 300 vehicles and paid a sum of Rs.1,000/- each towards the advertisement on those 300 vehicles. The Regional Transport Authority issued a permission for one year commencing from 16.06.2011 to 15.06.2012. Again on 20.06.2011, the petitioner sought permission for the other 300 vehicles.
3. The respondent Nos.1 and 2 in terms of a resolution dated 03.03.2012 on subject No.5(340)2011-12 increased the advertisement tax from Rs.86.25 to Rs.180/-. However, this resolution was not approved by the State Government. The petitioner, however, continued to pay the Regional Transport Authority, the demand raised by it from time to time. The petitioner, therefore, 4 informed the respondent Nos.1 and 2 about the payment already made to the Regional Transport Authority. The petitioner sought information from the respondent Nos.1 and 2 about the advertisement tax payable by each vehicle. It stated that since it had already paid fee prescribed by the Regional Transport Authority, the fee of Rs.500/- fixed by the respondent Nos.1 and 2 was sought to be waived. It claimed that the respondent Nos.1 and 2 had no authority to demand the fee of Rs.500/- per application. Nonetheless, the respondent Nos.1 and 2 issued a notice demanding a total tax liability of Rs.14,54,274/-. This was followed by a demand notice - 2 dated 06.08.2012 demanding Rs.500/- towards fee for the 600 vehicles. The petitioner submitted a representation to the respondent Nos.1 and 2 on 29.08.2012 seeking clarification about the authority of respondent Nos.1 and 2 to impose the tax. The respondent Nos.1 and 2 reiterated their demand in terms of their communication dated 28.01.2013, which included demand of application fee of Rs.500/- per vehicle. On 29.04.2013, the petitioner 5 submitted a reply along with a demand draft for Rs.2,99,000/- and claimed that tax of Rs.1,000/- per vehicle per year had already been paid to the Regional Transport Authority. Following this, the respondent Nos.1 and 2 issued another demand notice dated 18.07.2013, again demanding Rs.500/- per application. Being aggrieved by the said demand, the petitioner has filed this writ petition.
4. The learned counsel for the petitioner contended that the action of the respondent Nos.1 and 2 in imposing fee of Rs.500/- per application is arbitrary and illegal and amounts to double taxation. He contended that since the petitioner had already paid Rs.1,000/- per vehicle, the question of paying further sum towards the application fee does not arise. He contended that under Section 103 or Section 135 of the Karnataka Municipal Corporations Act, 1976 (henceforth referred to as "Act of 1976" for short), the respondent Nos.1 and 2 have no authority to impose tax for advertisement on the shell of 6 the vehicles. Nonetheless, the respondent Nos.1 an 2 are demanding and collecting the taxes, which are not included under Schedule VIII of the Act of 1976 as well as under
Bye-Law 3H(v) and under Annexure - 1 of the Bangalore Mahanagara Palike Advertisement Bye-Laws, 2006. He further contended that the respondent Nos.1 and 2 had demanding Rs.86.25 as advertisement tax per vehicle while Schedule VIII of the Act of 1976 and Rules prescribed a sum of Rs.50/-. He contended that the respondent Nos.1 and 2 have repeatedly demanded application fee of Rs.500/-, though in respect of 600 vehicles, the petitioner had already paid a sum of Rs.2,99,000/-. The petitioner, therefore, prayed that the impugned demand notices be quashed.
5. The respondent Nos.1 and 2 filed their statement of objections contending that the petitioner is liable to pay advertisement tax as mandated under Sections 134 and 135 of the Act of 1976 and the Bye-laws framed thereunder. They contended that there is no 7 provision under the Motor Vehicles Act or the Rules empowering the authorities to levy and collect advertisement tax. They contended that the petitioner was attempting to mislead them that the amount paid for obtaining permission to operate taxi services was the advertisement tax collected by the transport authorities. They contended that the petitioner was displaying advertisement of not only relating to its trade but also other commercial advertisement without payment of tax. They, therefore, contended that the imposition of tax and interest for delayed payment is in accordance with law. Since the petitioner failed to pay the tax demanded for the year 2012, the impugned notices were issued.
6. The learned counsel for the respondents invited the attention of the Court to Section 134 of the Act of 1976 as well as the Advertisement Bye-Laws - 2006 of Bangalore Mahanagara Palike and contended that the display of advertisements on vehicles is covered and therefore, the petitioner is liable to pay the tax. 8
7. In order to understand the case pleaded by the petitioner, it is relevant to consider Sections 134 and 135 of the Act of 1976, which are extracted below:-
"134. Tax on advertisement.- Every person who erects, exhibits, fixes or retains, upon or over any land, building, wall or structure any advertisement or who displays any advertisement to public view in any manner whatsoever, in any place whether public or private, shall pay on every advertisement which is so erected, exhibited, fixed, retained or displayed to public view, a tax calculated at such rates and in such manner and subject to such exemptions, as the Corporation may, with the approval of the Government, by resolution determine:
Provided always that the rates shall be subject to the maxima and minima laid down by the Government in this behalf:
Provided further that no tax shall be levied under this section on any advertisement or a notice,-
(a) of a public meeting, or Corporation of the city; or
(b) of an election to any legislative body; or
(c) of a candidature in respect of such an election:9
Provided also that no such tax shall be levied on any advertisement which is not a sky-sign and which,-
(a) is exhibited within the windows of any building; or
(b) relates to the trade or business carried on within the land or building upon or over which such advertisement is exhibited, or to any sale or letting of such land or building or any effects therein or to any sale, entertainment or meeting to be held upon or in such land or building; or
(c) relates to the name of the land or building, upon or over which the advertisement is exhibited, or to the name of the owner or occupier of such land or building; or
(d) relates to the business of any railways; or
(e) is exhibited within any railway station or upon any wall or other property of a railway except any portion of the surface of such wall or property fronting any street."
"135. Prohibition of advertisements without written permission of Commissioner.-
(1) No advertisement shall, after the levy of the tax under Section 134 has been determined upon by the Corporation, be erected, exhibited, fixed or retained 10 upon or over any land, building, wall, hoarding or structure within the city or shall be displayed in any manner whatsoever in any place without the written permission of the Commissioner.
(2) The Commissioner shall not grant such permission if,-
(i) the advertisement contravenes any bye-
law made by the Corporation; or
(ii) the tax, if any, due in respect of the advertisement has not been paid.
(3) Subject to the provisions of sub-section (2), in the case of an advertisement liable to the advertisement tax, the Commissioner shall grant permission for the period to which the payment of the tax relates and no fee shall be charged in respect of such permission:
Provided that the provisions of this section shall not apply to any advertisement erected, exhibited, fixed or retained on the premises of a railway relating to the business of a railway."
8. It is now well settled that a tax cannot be imposed without the authority of law and without specific authorisation under the statute. A tax cannot be inferred or assumed but has to be expressly provided for, in a statute. The reliance placed by the learned counsel for the 11 respondents on the Bangalore Mahanagara Palike Advertisement Bye-Laws, 2006 does not deal with display on vehicles and therefore, there is no provision for demanding advertisement tax. A perusal of the statement of objections filed by the respondents disclose the following assertion:
"As the petitioner used its fleet of cars for displaying not only its trade advertisement but also other commercial advertisements without paying tax, the impugned demand notices were issued in accordance with law."
9. A perusal of the notice of demand does not show the number of vehicles, on which the petitioner had displayed advertisements of other commercial entities. All that was displayed was the logo of the petitioner and the contact number, which cannot be termed as an advertisement. There is also no quantification of the number of vehicles, which are exigible to tax. 12
10. Under the circumstances, the impugned demand made by the respondents is liable to be set at naught. Hence, the following ORDER
i) The writ petition is allowed.
ii) The demand notices dated 11.07.2012, 06.08.2012 and 18.07.2013 issued by the respondents as per Annexures - G, H and N are quashed.
iii) It is open for the respondents to make proper and adequate provision to collect tax from vehicles, which carry any commercial advertisements.
Sd/-
JUDGE PMR