Harsh Automobiles Private Limited Vs Indore Municipal Corporation (Supreme Court of India)
Introduction: In a significant legal battle, the Supreme Court of India, in the case of M/s. Harsh Automobiles Pvt. Ltd. v. Indore Municipal Corporation, delivered a groundbreaking judgment on October 09, 2023. The verdict clarified that Advertisement Tax cannot be imposed on signboards meant for disseminating general business information. This case has far-reaching implications for businesses and local municipal bodies.
Supreme Court, held that the signboard affixed for displaying general information about the company would not come within the purview of Advertisement, therefore Advertisement Tax cannot be levied by the Municipal Corporation.
Facts:
M/s. Harsh Automobiles Private Limited (“the Appellant”) is engaged in the business of dealership of Hyundai Passenger Cars operating from the premises occupied in Indore and other places. The Appellant has affixed a signboard, displaying the trade name and business in the premises where business is being conducted.
Municipal Corporation, Indore, (“the Respondent”) issued a Show Cause Notice dated July 4, 2015 (“the Impugned Notice”), raising a demand of the amount of Rs. 2,03,850/- for recovery of Advertisement Tax claiming that the Advertisement Tax has to be paid on the display of signboards at its premises. Objections were filed by the Appellant against the Impugned Notice on the ground that the Appellant has affixed a signboard for disseminating knowledge to the general public about the Appellant’s business details and products manufactured.
Aggrieved by the Impugned Notice, the Appellant filed a writ petition before the Hon’ble Madhya Pradesh High Court, Indore Bench [WP (C) 1842 of 2016] for setting aside the demand raised for the Advertisement Tax. The High Court, relying upon the judgement of Bharti Airtel v. State of Madhya Pradesh [WP (C) No. 2296 of 2012 dated January 12, 2015], vide order dated October 24, 2017 (“the Impugned Order”) dismissed the writ petition, holding that, the Appellant is liable to pay the Advertisement tax on the signboard, displaying the trade name and business, affixed in the said premises.
Aggrieved by the Impugned Order, the Appellant filed an appeal before the Hon’ble Supreme Court for setting aside the demand of payment of Tax raised through Impugned Notice.
Issue:
Whether the Appellant is liable to pay Advertisement Tax on the signboard affixed disseminating knowledge about the Appellant’s business details and products manufactured?
Held:
The Hon’ble Supreme Court in Civil Appeal No. 5362 of 2023 held as under:
