2019 (11) TMI 344 - HC - GST

Contempt application - power of levy advertisement tax post GST - bye-laws were notified in the Official Gazette and were enforced w.e.f. 6.1.2018 - vires of the Mathura Vrindavan Nagar Nigam (Vigyapan Kar Ka Nirdharan and Wasuli Viniyaman) Upvidhi, 2017 - submission is that the aforesaid bye-laws were notified in the Official Gazette and were enforced w.e.f. 6.1.2018 but on the said date the Municipal Corporation had no authority in law to impose any advertisement tax - HELD THAT - The Court has proceeded to examine the record in question and from perusal of record it is apparent that now fresh cause of action has arises in the present matter and in case the order dated 1.11.2019 is being flouted by the opposite party, the applicants would be at liberty to invoke the remedy as is available to them in law. Contempt application disposed off.

Summary

Issues:
Challenge to the vires of the Mathura Vrindavan Nagar Nigam (Vigyapan Kar Ka Nirdharan and Wasuli Viniyaman) Upvidhi, 2017 as ultra-vires to the provisions of the U.P. Municipal Corporation Act, 1959, Central GST Act, and U.P. GST Act, and Articles 14 and 19 of the Constitution of India.

Analysis:
The applicants challenged the legality of the bye-laws related to Advertisement Tax enforced by Mathura Vrindavan Nagar Nigam. The petitioners argued that the Municipal Corporation lacked the authority to impose advertisement tax after the enforcement of the U.P. GST Act, which omitted the provision allowing such taxation. Additionally, the State's power to legislate on advertisement tax was deleted by the Constitution (101st Amendment) Act, 2016. The Court noted that once the State lost the power to make laws on advertisement tax, Municipal Corporations also lost the authority to impose such taxes. The Division Bench's previous decision in a similar case supported the challenge, leading to the declaration of the bye-laws as ultra-vires.

Further Analysis:
The Court emphasized that the Municipal Corporation did not possess the legislative competence to promulgate the bye-laws due to the omission of relevant sections in the U.P. Municipal Corporation Act and the Constitution. The judgment highlighted the legal basis for striking down the bye-laws, citing the absence of statutory authority for the imposition of advertisement tax. The Court's reasoning was based on the constitutional provisions and legislative amendments that removed the power of Municipal Corporations to levy such taxes.

Contempt Application:
A subsequent order dated 1.11.2019 raised a fresh cause of action in the case. The Court noted that if the opposite party failed to comply with the order, the applicants could seek legal remedies. The contempt application was disposed of, and any notices were discharged accordingly. The Court's decision reaffirmed the importance of compliance with legal orders and the consequences of non-compliance in such matters.