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2025 (3) TMI 1031 - HC - GSTAuthority of Kanpur Nagar Nigam to levy and collect advertisement tax or fees after the legislative changes brought by the U.P. Goods and Services Tax (GST) Act 2017 and the Constitution (101st Amendment) Act 2016 - HELD THAT - Insofar as in the penultimate paragraph of the order (of which clarification is sought) it has been clearly provided that the demand impugned in the writ petition to the extent such demands fall in the teeth of Section 173 of U.P. G.S.T. Act read with the 101st Constitutional Amendment is quashed and further to the extent it has been provided by that co-ordinate bench that any amount of Advertisement Tax deposited by the petitioners for the period beyond 01.04.2017 may be refunded to the petitioners and no further or other direction was issued that order is crystal clear as to its reasoning and as to the effect it causes. It admits of no doubt as to what has been provided and what has not been decided. Conclusion - The Kanpur Nagar Nigam s demands for advertisement tax post-July 1 2017 are illegal. To the extent the order is itself speaking and admits of no doubt the present application fails and is liable to be dismissed. It is dismissed.
ISSUES PRESENTED and CONSIDERED
The primary legal issue considered in this judgment is whether the Kanpur Nagar Nigam has the authority to levy and collect advertisement tax or fees after the legislative changes brought by the U.P. Goods and Services Tax (GST) Act, 2017 and the Constitution (101st Amendment) Act, 2016. Specifically, the Court examined:
ISSUE-WISE DETAILED ANALYSIS 1. Authority to Levy Advertisement Tax Post-GST Implementation Relevant Legal Framework and Precedents: The authority to levy advertisement tax was originally contained in Section 172(2)(h) of the Municipal Corporation Act, 1916. This provision was deleted by Section 173 of the U.P. GST Act effective from July 1, 2017. Additionally, the power of the State Government to legislate on advertisement tax under Entry 55 of List II of the VII Schedule of the Constitution was removed by the Constitution (101st Amendment) Act, 2016. Court's Interpretation and Reasoning: The Court noted that after the legislative changes, neither the State Government nor the Nagar Nigam had the authority to impose or collect advertisement tax. The Court emphasized that any tax collection must be backed by statutory authority as mandated by Article 265 of the Constitution of India. Application of Law to Facts: The Court applied these legal principles to conclude that the Nagar Nigam's demand for advertisement tax post-July 1, 2017, was illegal and without jurisdiction. 2. Nature of Amounts Collected: Tax vs. Fees Key Evidence and Findings: The Kanpur Nagar Nigam argued that the amounts collected were not advertisement taxes but advertisement fees for the use of land for hoardings. The petitioners contested this, asserting that the amounts were collected as taxes. Treatment of Competing Arguments: The Court examined the demand notices and previous orders to determine the nature of the amounts collected. It found that the notices and the Court's previous order clearly referred to the amounts as advertisement tax. Conclusions: The Court concluded that the amounts collected were indeed advertisement taxes and not fees, as argued by the Nagar Nigam. Consequently, any amount collected as advertisement tax after July 1, 2017, must be refunded to the petitioners. SIGNIFICANT HOLDINGS Core Principles Established: The judgment reinforces the principle that no tax shall be levied or collected without statutory authority, as per Article 265 of the Constitution of India. It also clarifies that legislative changes under the GST framework and constitutional amendments have removed the authority to levy advertisement tax from municipal bodies. Final Determinations on Each Issue: The Court held that the Kanpur Nagar Nigam's demands for advertisement tax post-July 1, 2017, were illegal. It ordered that any such taxes collected must be refunded. The Court dismissed the clarification application, affirming that the original order was clear and required no further clarification.
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