SELVEL ADVERTISING PRIVATE LTD Vs. STATE OF ORISSA

JUDGEMENT

(1.) THIS writ petition has been filed with a prayer to quash the Rourkela Municipality Regulations of tax on advertisement, 2010 made on 4th January, 2011 (Annexure-1) by the Rourkela Municipality, Rourkela in exercise of powers conferred by Sub-Section (30) of Section 388 of the Orissa Municipal Act, 1950 (for short 'the Act, 1950') on the ground that the same is unconstitutional being violative of Articles 14, 19, 243X, 285, 300A of the Constitution of India. In the present writ petition the petitioners are five in number. Petitioner No.1 is a Private Limited Company and petitioners Nos.2 to 5 are of partnership concerns.

(2.) CASE of petitioner No.1 as narrated in the Writ Petition in a nut-shell is that it is a Private Limited Company incorporated and registered under the provisions of the Companies Act, 1956 and has its office in Rourkela. It is a pioneer company in the field of advertisement in Eastern India. Petitioner No.1 operates in almost all major cities of the country. The petitioners basically deal in displaying of advertisement by way of hoardings and has been operating in Rourkela for varied periods ranging between 5 to 30 years. The petitioners have valuable client base which includes public sector undertakings, industrial conglomerates and other leading business houses. They deal with commercial display of advertisement by way of hoardings in the town of Rourkela, which is under the jurisdiction of the Rourkela Municipality. Such display of hoardings was to be facilitated by payment of necessary licence fee and obtaining requisite permits from the Rourkela Municipality to utilize the earmarked sites for putting up their hoardings. Rourkela Municipality on 04.01.2011 issued the impugned Rourkela Municipality Regulations of Tax on Advertisement, 2010 (for short, "Regulations, 2010") under Section 388(30) of the Orissa Municipal Act, 1950 of the Act, 1950. According to the petitioners, the said Regulations are violative of the Constitution of India and also ultra vires the Act, 1950, hence null and void.

(3.) MR . J. Das, learned Senior Advocate submitted that the impugned Regulations are ex facie violative of Articles 14, 19(1)(a), 243X, 285, 300A of the Constitution and also ultra vires the Act, 1950 and liable to be set aside. It is further submitted that in view of the provisions contained in Article 243X of the Constitution, the Municipality can levy, collect appropriate taxes, duties, tolls and fees, provided that it is so authorized by the legislature of the State, by law, and provided further that such levy is in accordance with such procedure and subject to such limits as are specified in law. Referring to Section 388(30) of the Act, 1950, Mr. Das submitted that this Section only permits the Municipality to make regulations or bye-laws for prohibition and to regulate advertisements in public roads or parks and does not pertain to powers to levy taxes. Law is well settled that the power to tax must be specified in the Statute itself and cannot be inferred. As far as Municipality's power to tax is concerned, Article 243X clearly states that this power can only be conferred on the Municipality by the State Legislature by law. In fact, no conferment of power on Municipality is there in provisions of the Act, 1950 and hence, the levy of tax in question is ultra vires the Act, 1950. Thus, it is submitted that the Regulations are ultra vires the Act, 1950. Section 388(3) pertains to powers of taxation and provides that Municipality can make regulations only for the regulation of the time and mode of collecting taxes under this Act. Thus, levy is under the Act and the Municipality has no powers to levy the tax on its own. Placing reliance upon the judgment of the Hon'ble Supreme Court in the case of Bimal Chandra Banerjee vs. State of M.P., (1970) 2 SCC 467, it is submitted that no tax can be imposed by any bye- law or rule or regulation unless the statute under which the subordinate legislation is made specifically authorizes the imposition even if it is assumed that the power to tax can be delegated to the executive. The basis of the statutory power conferred by the statute cannot be transgressed by the rule-making authority. A rule making authority has no plenary power. It has to act within the limits of the power granted to it.