Railways not liable to take permission for Advertisement Hoardings erected on its land and also not liable to Advertisement Tax: HC

Union of India Vs Municipal Corporation of Greater Mumbai (Bombay High Court)

Railway not require permission of Municipal Corporation for erecting Advertisement Hoarding on its land 

Provisions of section 328 and 328A and 479 of Mumbai Municipal Corporation Act (MMC Act), would not be applicable to any of the activities that railway administration may execute in pursuance of the powers vested in it under Section 11. Undisputedly, since under clause (da) of Section 11, the railway administration is also empowered to develop any railway land for commercial use and since under clause (d), it is also empowered to erect and construct such houses, warehouses, offices and other buildings, and such yards, stations, wharves, engines, machinery apparatus and other works and conveniences as the railway administration thinks proper; the hoardings which are erected by the railways on its land would not require the permission of the Corporation either under Section 328 or 328A of the MMC Act and consequently no license would be required under section 479.

Municipal Corporation not entitled to levy advertisement tax  on the advertisements displayed on the hoardings erected on the land of the railways

The next question that we are required to answer is, as to whether the Corporation would be entitled to levy advertisement tax or not on the advertisements displayed on the hoardings erected on the land of the railways. Ordinarily, having answered the first question, it would not have been necessary for us to answer the said question. However, since the Corporation relied on the judgment of the Apex Court in the case of Links Advertisers and Business Promoters vs. Commissioner, Corporation of the City of Bangalore  (AIR 1977 SC 1646), we find that it will be necessary for us to deal with the said issue.

It will have to be noted that the case of Link Advertisers and Business Promoters (supra) was decided by the Hon’ble Supreme Court on 21st April, 1977. However, the Railways Act, 1989 which contains section 185 has been enacted in the year 1989. Their Lordships, in the said case, have referred to Section 136 of Bangalore Municipal Corporation Act, 1949, relevant part of which reads thus:

“Every person who erects, exhibits, fixes or retains upon or over any land, building, wall, hoarding or structure any advertisement or who displays any advertisement to public view in any manner whatsoever, in any place whether public or private, shall pay on every advertisement which is so erected, exhibited, fixed retained or displayed to public view, a tax calculated at such rates and in such manner and subject to such exemptions, as the corporation may, with the approval of the Government, by resolution determined:

X X X

“Provided further that no such tax shall be levied on  any advertisement which is not a sky­sign and which­

X X X

(e) is exhibited within any railway station or upon any wall or other property of a railway except any portion of the surface of such wall or property fronting any street.

Explanation 1­ The word ‘structure’ in this section shall include any movable board on wheels used as an advertisement or an advertisement medium.

(Emphasis supplied).”

Their Lordships observed that the intention of the statute was to tax certain types of advertisements. The pith and substance of the entire section was the taxation of advertisements fixed, erected, or exhibited on any land, building, wall, hoarding, structure etc. Their Lordships held that the tax contemplated under section 136 was on advertisements and not tax on premises or buildings. It could thus be seen that when Their Lordships decided the said case, there was no provision like Section 185, which clearly provides that notwithstanding anything contained in any other law, railway administration is not liable to pay any tax to any local authority in respect of any advertisement made on any part of the railway, unless the Central Government by notification declares that railway
administration to be liable to pay the tax specified in such notification. Undisputedly, no such notification has been issued by the Central Government. As such, the said judgment would not be applicable to the facts of the present case, in view of specific provision contained in Section 185 of the Railways Act, which were not present in erstwhile Railways Act of 1890.