Judgment:
ORDER
Ram Mohan Reddy, J.
1. Common questions of feet and that of law arise for decision making, hence with the consent of learned Counsel for the parties, the petitions are clubbed together, finally heard and are disposed of by this common order.
2. The petitioners are companies registered under the Companies Act, 1956, have their registered offices at the addresses mentioned in the cause title, some of whom carry on business of providing cellular, mobile telephony services, while others manufacturer soft drinks and paints, have appointed dealers/distributors/retailers to sell and distribute their wares as well as Subscriber Identification Module (SIM) cards and to serve the customers, the said dealers are spread over Bangalore city and carrying on their trade and business from their shop premises. In the course of business, the dealers/retailers/distributors, put up boards/glow signs within their shop premises facing the road indicating brand names of the petitioners, in relation to their trade and business including rendering services to the customers.
3. It appears that when the respondent-Bruhat Bangalore Mahanagara Palike (BBMP) sought to remove the boards displayed in the premises of the dealers/distributors/retailers, for non-payment of advertisement tax under the Karnataka Municipal Corporation Act, 1976, for short the 'Act', the petitioners having invoked the writ jurisdiction of this Court was disposed of reserving liberty to the petitioners to file necessary representations with a direction to the BBMP to consider the representations and pass orders thereon and if exemptions are not granted from payment of Advertisement tax, to recover the same from the petitioners.
4. In compliance with the said order, the petitioners having made representations, the Special Commissioner, BBMP, on hearing the petitioners, by order dt 7.4.2007 (impugned in each of the petitions) held that the advertisements not displayed in the premise belonging to the petitioners but their dealers/retailers/distributors, being third parties, with the intention to attract the prospective customers and to propagate ideas with regard to the goods and services rendered by the petitioners, disentitle the petitioners to exemption under Section 134 of the Act and accordingly, rejected the representations with a direction to pay the taxes. Sequentially, the authorities of the BBMP issued notices to the petitioners to pay the advertisement tax. Hence, these petitions.
5. The petition is opposed by filing statement of objections of the BBMP, though not in all the petitions, on the common ground that the advertisements of the petitioners are not put upon the premises belonging to them, but on the shop premises where their products are sold for a commission and hence attracts Sections 134, 135, 136 and 138 of the Act and are not exempt under the third proviso to Section 134 of the Act. It is further stated that under Section 135 of the Act, the petitioners are required to secure prior permission of the BBMP to display the advertisement and sign boards.
6. Sri Udaya Holla, learned Sr. Counsel for the petitioners points out to the third proviso to Section 134 of the Act and submits that identical provision in Section 129-A, third proviso and explanation (2) of the Madras City Municipal Act (IV/1919), in the matter of claim of exemption from advertisements tax, having arisen for consideration, a learned Single Judge of the High Court of Judicature at Madras in V. Vasudev Bhat v. Revenue Officer, Corporation of Madras : 1963 I Madras L.J. Report 7, held that the third proviso to the said Section covers the advertisement and excepts it from the purview of the first paragraph of the provision. It is further submitted that the law and facts in these cases being identical to that considered by the Madras High Court, the said decision is applicable on all its fours. It is contended that the third proviso not being confined to any exclusive trade or business carried am within the I building in any particular goods, the exhibiting of the I advertisement hoardings of the petitioners by their dealers/distributors/retailers, in their premises attracts the exemption from payment of tax.
7. Per contra, learned Counsel for the respondents-BBMP while not seriously contestingh the applicability of the Judgment in V. Vasudev Bhat's case (supra 1), places reliance upon the following two decisions of the Apex Court:
i) New Delhi Municipal Committee v. Allied Motors Pvt. Ltd. and Ors. : 1995 Supp (4) SCC 150;
ii) ICICI Bank v. Municipal Corporation of Greater Bombay and Ors. (2005)6 SCC 404.
to contend that the word 'advertisement' referred to in the third proviso in the commercial and ordinary parlance would mean business, trade or commerce carried on by the advertiser, having some commercial exposition, in order to direct or solicit customers to the product or services, permanently, shown in the advertisement, does not attract the exemption under the third proviso, from payment of tax.
8. In order to better appreciate the contentions advanced by the learned Counsel for the parties, it is necessary to extract the third proviso to Section 134 of the Act which runs thus:
Provided also that no such tax shall be levied on any advertisement which is not a sky-sign and which-
(a) is exhibited within the windows of any building; or
(b) relates to the trade or business carried on within the [vacant land or building] upon or over which such advertisement is exhibited, or to any sale or letting of such [vacant land or building] or any effects therein or to any sale, entertainment or meeting to be held upon or in such (vacant land or building]; or
(c) relates to the name of the [vacant land or building], upon or over which the advertisement is exhibited, or to the name of the owner or occupier of such [vacant land or building]; or
(d) relates to the business of any railways; or
(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.
9. In V. Vasudev Bhat's case (supra 1), the third proviso to Section 129-A of the City Municipal Act reads thus:
Provided further that no such tax shall be levied on any advertisement which is not a sky - sign and which (a)----- (b) relates to the trade or business carried on within the land or building upon or over which such advertisement is exhibited, or to any sale or letting of such land or building or any effects therein or to any sale, entertainment or meeting to be held upon or in the same.
10. The learned Single Judge of the Madras High Court having regard to the phrase 'the trade or business carried on within the building upon or over which advertisement is exhibited.' accepted the contention that the proviso is not confined to any exclusive trade or business carried on within the building, in any particular, goods and observed thus:
Trade or business are obviously words of wide import It cannot be said that only if sales are exclusively carried on in particular goods in a building, it can be described as trade or business. Selling of cigarettes among other goods is as much carrying on business in cigarettes. As I read the Proviso, there is nothing in it to suggest that trade or business contemplated by it should be exclusive trade or business in particular goods and no other carried on within the building. It is, however, urged for the respondent that the article 'the' preceding the words 'trade or business' is indicative of the exclusive character of the trade or business. I am unable to spell from the use of the word 'the' alone any such limitation. In my opinion, the selling of cigarettes, among other things, in the building falls within the Proviso.
11. In New Delhi Municipal Committee's case (supra 3), what tell for consideration was the bylaws framed under the Punjab Municipal Act, 1911, providing exemption from tax in respect of 'name board' displayed by the traders on their own premises provided they do not contain any item of advertisement. Clause(e) of bye-law (7) reads thus:
(e) Advertisement which relates to the trade profession or business carried on within the land or building upon or over which such advertisement is exhibited or to any sale or setting of such land or building or any effects therein or any sale, entertainment or meeting to be held on or upon or in the same.
Provided that exemption under this item shall apply only to one board displayed by the owner or his agent.
Though the claim for exemption from advertisement tax was not on the interpretation of the aforesaid Clause nevertheless, their lordships, observed thus:
Even distinct are the advertisements as conceived of in Clause (e) of Bye-law (7), which relate to the trade, profession or business carried on within the land or building upon or over which such advertisement is exhibited or to any sale or letting of such land or building or any effects therein or any sale, entertainment or meeting to be held on or upon or in the same; provided that exemption under this item shall apply only to one board displayed by the owner or his agent.
In paragraph 8, their lordships further observed thus:
The Bench when called upon by the present appellant to give favourable interpretation to Clause (a) bylaw (7) on the basis of Clause (e) observed that it appears to them that Clause (e) would apply to those advertisements which relate (only) to the trade, profession or business or something more than mere name boards. The respondents herein (the appellants thereat) did not build their case on the anvil of Clause (e) of Bye-law (7) and any attempt herein, in the absence of the views of the High Court, would negate proper handling. We would therefore leave the matter at that.
12. Prom the observations supra the Apex court left open the question as to whether Clause (e) of Bye- law 7 of the said Bye-laws under the Punjab Municipal Act, 1911, entitles exemption from tax over advertisements exhibited by retailers or persons. This judgment, in my considered opinion does not support the case of the BBMP.
13. in ICICI Bank's case (supra 3), the Apex court dealing with the provisions of Section 328-A of the Bombay Municipal Corporation Act, 1888, more appropriately the definition and scope of the word 'Advertisement', held that it 'means to make publicly known an information by some device and to draw or attract attention of the public/individual concerned to such information. It need not necessarily be to sell only or solely for commercial exploitation.' The fact therein was that ICICI Bank installed ATM centres and extension counters over which sign boards were fixed indicating their location. The fact and law that fell for consideration are not similar to the cases on hand and therefore, does not support the case of the respondents.
14. The decision of the Madras High Court in V. Vasudev Bhat's case (supra 1), in my considered opinion applies on all its fours and for the very same reasons, findings and conclusions, the petitioners are entitled to exemption from payment of advertisement tax under the third proviso to Section 134 of the Act The order of the Special Commissioner, impugned and the demand for payment of taxes by the notices impugned are illegal.
The writ petitions are allowed. The petitioners, in the facts and circumstances of these cases are exempted from payment of advertisement tax under the third proviso to Section 134 of the Act, in respect of the advertisement boards displayed by their agents/distributors/retailers, in respect of the petitioners' products, in relation to their trade, or business, in their premises. If the petitioners have deposited any sums of money pursuant to the interim directions of this Court, the respondent is directed to forthwith refund the same to the petitioners.