July 2019

GOODS AND SERVICES TAX (GST)

PULOMA DALAL | JAYESH GOGRI | MANDAR TELANG
Chartered Accountants

 I. HIGH COURT


25 2019 [23] G.S.T.L. 162 (All) DM Advertisers Agency vs. State of U.P.
Date of order: 14th February, 2019

 

If States do not have power to levy tax on any particular activity, municipal corporations cannot enjoy such power – No taxes can be levied without power

 

FACTS

A writ petition was filed by the petitioner, an advertising company, challenging the vires of the Mathura Vrindavan Nagar Nigam (Vigyapan Kar Ka Nirdharan and Wasuli Viniyaman) Upvidhi, 2017 which enforced bye-laws with effect from 6th January, 2018 by virtue of section 172(2)(h) of the U.P. Municipal Corporation Act whereby advertisement tax was levied. However, the said provision had stood deleted vide section 173 of the U.P. GST Act enforced on 1st July, 2017. Moreover, the power to impose advertisement tax by the state was divested through section 17 of the Constitution 101st (Amendment) Act with effect from 16th September, 2016 which deleted Entry 55 of List-II of the VIIth Schedule of the Constitution of India by which the state legislature was invested with the power to make laws in respect of taxes on advertisement.

 

HELD

The Hon’ble Court held that when the state legislature was deprived of power to levy tax on advertisement, clearly the municipal corporations also ceased to have the power to impose any tax on advertisement. Therefore, Mathura Vrindavan Nagar Nigam had no legislative competence on 6th<

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