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Issues: Challenge to imposition and realization of advertisement tax by Nagar Palika Parishads/Nagar Panchayats on hoardings/signboards and glow-signs not belonging to them or on public land.
Judgment Details: The Court held that u/s 128 of the U.P. Municipalities Act, 1916, Nagar Palika Parishads/Nagar Panchayats can only impose tax on items listed in the provision, excluding advertisement tax on hoardings/signboards and glow-signs on private properties. The argument that such taxes could be imposed as fees u/s 293 and 293A was rejected, as these sections pertain to fees for use of municipality property or public places with facilities. The Court also ruled out justification for the tax as a license fee u/s 294, emphasizing the need for specific permissions and byelaws, which were absent in this case. The Court highlighted the requirement of State Government approval for framing byelaws under Section 298 (1) to regulate activities for health, safety, and convenience of municipal area inhabitants. Referring to ICICI Bank vs. Prakash Kaur (2007) 2 SCC 711, the Court dismissed the argument that private agencies could recover such taxes or fees. The judgment in Bharti Airtel Limited vs. State of UP was endorsed, and the decision of the High Court of Uttrakhand in Vodafone Essar South Limited vs. State of Uttrakhand was cited as consistent with the Lucknow Bench's ruling. Consequently, all writ petitions were allowed, annulling the advertisement tax imposed by Nagar Palika Parishads/Nagar Panchayats or their agents. Refunds were ordered for amounts deposited in compliance with court directions, with no cost implications. The objection against refunding consumer-borne tax amounts was dismissed, as the tax imposition was deemed illegal and unauthorized. The principle of unjust enrichment was deemed inapplicable, and refunds were directed to be processed within a month upon request by the petitioners.
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