Order Date – 30 November 2022

Parties: M/s Raheel Communication and others Vs Commissioner, Deputy Commissioner, Revenue Officers and others

Facts – 

• The Petitioners, M/s Raheel Communication and others are carrying on the business of outdoor advertisements involving erecting hoardings after obtaining necessary permissions.
• Petitioners were required to pay advertisement tax in respect of the display of advertisements upon the demands that were raised by the respondent authorities.

Issue – 

• Whether the Respondents authorities are justified in issuing demand notices calling upon the petitioners to pay the tax on advertisement?

Order – 

• The Hon’ble High Court held that on and after implementation of Goods and Service Tax Act, 2017 consequent upon the 101st amendment to the Constitution certain taxes including the taxes and advertisement which were levied by the respective States and the Union are subsumed into goods and service tax.
• The authority to levy tax which was available under entry No.55 List II (State List) of the Seventh Schedule to the Constitution has been omitted. Consequently, the Municipal Corporations and the Municipalities which are the inferior corporate bodies of the State do not have power to levy and collect the tax on advertisement. 
• It was also observed that as per Annexure-R of the Karnataka Gram Panchayath and Panchayath Swaraj Act levy of tax and advertisement the Panchayath has been omitted.
• Hence the levy is out of the limits of Panchayaths.