The Corporation authorities have contended that, they have a policy guidelines of display of advertisement within the Kolkata Metropolitan area. Under such policy guidelines, the authorities are to look at the desirability of the content of the advertisement in the hoardings or glow signs. They are also to look at whether the hoardings or glow signs by themselves or the contents therein are causing any public nuisance or is a threat to the public convenience. Since the Corporation authorities are discharging such functions, they are entitled to a fee on the principles of quid pro quo. The Corporation is not entitled to advertisement fees from the persons noted in Calcutta Soft Drinks Pvt. Ltd. (supra). The writ petition concerns hoardings and glow signs put on the properties belonging to individuals. Section 203 of the Act of 1980 deals with license for use of site for the purpose of advertisement. The Section itself does not permit the Municipal Corporation authorities to levy any license fee. It prohibits a person from putting up any hoarding except under and in conformity with the terms and conditions of the license. Section 204 of the Act of 1980 allows tax to be levied on advertisement. However, Calcutta Soft Drinks Pvt. Ltd. (supra) has held that, the Corporation is not entitled to advertisement fees from the persons noted therein. The exemption given in Calcutta Soft Drinks Pvt. Ltd. (supra) would also apply to a hoarding. The hoardings and glow signs put in a property belonging to an individual and not visible to a member of the public from a public road is not chargeable by the Corporation. Moreover, as noted above, Section 203 does not allow the authority to levy any license fee. On the concept of quid pro quo, it is observed that, the Corporation authorities are required to do certain things under Section 203. That would entail some cost. However, the Corporation authorities are taking trade license fees. The Corporation authorities are, therefore, at liberty to factor in the cost involved in the exercise under the guidelines while considering the fee applicable for obtaining a trade license.
In view of the discussions above, the demands for license or permission fees for the glow signs made against the petitioner are set aside. The prayer for compensation made in the writ petition was not pressed at the hearing.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
The petitioners have challenged the demand for license and permission fees raised by the Kolkata Municipal Corporation authorities for the hoardings set up by the petitioners.
Learned Senior Advocate for the petitioner has submitted that, the petitioners, in its usual course of business, are required to set up hoardings for the purpose of advertisement of their product. The hoardings and glow signs of the petitioners are exempted from payment of advertisement tax under Section 204(2)(c) of the Kolkata Municipal Corporation Act, 1980. Learned Senior Advocate for the petitioners has relied upon All India Reporter 2007 Calcutta page 136 (Calcutta Soft Drinks Pvt. Ltd. v. Calcutta Municipal Corporation & Ors.) in this regard.
Learned Senior Advocate for the petitioners has referred to Sections 202 and 203 of the Kolkata Municipal Corporation Act, 1980 and submitted that, these two sections deal with permission fee and license fee respectively. He has also referred to Section 204 of the Act of 1980. Referring to Section 131 of the Act of 1980 learned Advocate for the petitioners has submitted that, the same relates to annual budget of the Kolkata Municipal Corporation. He has submitted that, neither Section 202 nor Section 203 confers any power on the Kolkata Municipal Corporation to levy any fees on the hoardings and glow signs. He has referred to 2005 Volume 4 Supreme Court Cases page 245 (Calcutta Municipal Corporation & Ors. v. Shrey Mercantile (P) Ltd. & Ors.) and 2015 Volume 13 Supreme Court Cases page 748 (State of Tamil Nadu & Anr. v. TVL. South Indian Sugar Mills Association & Ors.) in support of such contentions. He has submitted that, imposition of tax without authority of law is violative of Article 265 of the Constitution of India. He has referred to the demands raised by the Corporation authorities and submitted that, the demands are on recurring basis and, therefore, they are to be treated as tax and not fees. Moreover, he has submitted that, the Act of 1980 does not authorize the Corporation authorities to levy a licence fee or a permission fee. He has relied upon 1992 Volume 3 Supreme Court Cases page 285 (Ahmedabad Urban Development Authority v. Sharadkumar Jayantimkumar Pasawalla & Ors.) in support of such contention.
Learned Senior Advocate for the petitioners has submitted that, the Corporation authorities are not rendering any service to the petitioners. The demand for permission fee or a license fee, therefore, is void. He has referred to the affidavit-in-opposition filed by the Corporation authorities and submitted that, the Corporation authorities have not stated nor have demonstrated that, the Corporation authorities are rendering any service for them to demand a permission or a license fee. He has prayed for quashing of the demands raised by the Corporation.
Learned Additional Advocate General appearing for the Corporation authorities has submitted that, the right to carry on business under Article 19 of the Constitution of India is subject to reasonable restrictions. The Corporation authorities are seeking to modulate the setting up of hoardings or glow signs in the general public interest. The Corporation authorities are responsible to look at the structural stability of a hoarding or a glow sign. They are also required to look into whether or not the hoardings or glow signs obstruct any public view or causes any traffic hazard. He has referred to the policy guidelines of the Corporation authorities and submitted that, the Corporation authorities are required to assess a hoarding or a glow sign to find out whether or not they are within the policy guidelines. He has relied upon All India Reporter 1952 Supreme Court page 196 (The State of Madras v. V.G. Row), All India Reporter 1960 Supreme Court page 430 (Narendra Kumar & Ors. v. The Union of India & Ors.) and All India Reporter 1985 Supreme Court page 660 (K. Ramanathan v. State of Tamil Nadu & Anr.) in support of the proposition that, restrictions would include a prohibition. On the aspect of the Corporation authorities being entitled to obtain license fee, he has referred to All India Reporter 1985 Supreme Court page 61 (M/s. Samarias Trading Co. Pvt. Ltd. v. S. Samuel & Ors.). He has relied upon Section 203 of the Kolkata Municipal Corporation Act, 1980 and has submitted that, the Corporation authorities have the power to impose fees. He has submitted that, for the purpose of levy of fees there has to be a quid pro quo. He has relied upon 1999 Volume 2 Supreme Court Cases page 274 (Secunderabad Hyderabad Hotel Owners’ Association & Ors. v. Hyderabad Municipal Corporation, Hyderabad & Anr.) and submitted that, the Corporation authorities are entitled to levy fees for the services rendered by the Corporation authorities in assessing the hoardings or the glow signs.
Learned Additional Advocate General has relied upon the various provisions of the Kolkata Municipal Corporation Act, 1980 including Sections 199, 543 and 131 in support of the contention that, the Corporation authorities have the power to impose and demand the license and permission fees as sought to be done in the instant case. Learned Additional Advocate General appearing for the Corporation has relied upon 1976 Volume 1 Supreme Court Cases page 283 (Dr. Satyabrata Dutta Choudhury v. State of Assam & Ors.), 2001 Volume 6 Supreme Court Cases page 446 (Meghalaya State Electricity Board & Anr. v. Jagadindra Arjun), 1997 Volume 9 Supreme Court Cases page 495 (Krishnan Kakkanth v. Government of Kerala & Ors.), 1998 Volume 4 Supreme Court Cases page 117 (State of Punjab & Ors. v. Ram Lubhaya Bagga & Ors.) and 2014 Volume 4 Supreme Court Cases page 156 (Pathan Mohammed Suleman Rehmatkhan v. State of Gujarat & Ors.) in support of such contentions.
The first petitioner carries on the business of providing mobile, telephone services to consumers. The first petitioner vends and markets its products and services, inter alia, through showrooms and outlets. In order to attract business, the first petitioner installs glow signs boards or back-lit boards or non-back-lit boards or sign boards outside or atop the outlets. The Kolkata Municipal Corporation authorities had demanded license or permission fees for the glow signs. According to the petitioners, the Corporation authorities are not entitled to such fees. According to the petitioners, the Corporation being a statutory authority and established under the provisions of the Kolkata Municipal Corporation Act, 1980, such Act of 1980 does not permit the Corporation authorities to demand or realize any license fees for glow signs put on outlets of the first petitioner.
The Corporation authorities have traced their rights to impose and demand license fees and permissions fees to Sections 131, 199, 203, 204 and 543 of the Act of 1980. Such sections are as follows:-
