Supreme Court rules Advertisement Tax not leviable on Signboards displaying Business information [Read Order]

The Supreme Court of India recently ruled that the advertisement tax is not leviable on the signboards displaying business information. The appellant company, M/S Harsh Automobiles Private Limited and M/S Sanghi Brothers (Indore) Private Limited has put up a name board displaying its trade name within the business premises displaying the products and services in which the appellant is dealing and as such the notice came to be issued by the second respondent demanding advertisement tax of Rs.1,31,137/- and yet another notice demanding Rs.51,000/- was issued in respect of another premises where similar board had been put up by the appellant An objection was raised to the same by the appellant contending inter alia that putting up of sign board and displaying the name of the appellant’s business would not fall within the definition of “advertisement”, rather it was displaying its own name and business through the sign board as it would be necessary for the general public to know the name and nature of business and the product it was dealing with. The Counsels for the appellant submitted that non-putting up of sign board displaying the name of the firm would result in the public or the customer making an extensive research and survey for buying a particular product or availing the services which the appellants were to provide. It was further contended that where the sign boards are put up to attract the customers and to promote the purchase of a particular product and providing information of the said product or service at a particular place would be an ‘advertisement’ whereas depicting the name of the business establishment and the products being dealt by it would only be an information to the general public and such display of information would not amount to advertisement and as such it would not be liable to be taxed. The counsels further submitted that the imposition of “advertisement tax” on sign boards displaying the name and products of the business establishment is violative of Article 19(1)(a) and 19(1)(g) of the Constitution of India. A Two-Judge Bench of Justice S. Ravindra Bhat and Justice Aravind Kumar observed that “Prima facie, the sign boards are display boards displayed by the appellants’ companies in the instant appeals would indicate that they have displayed on their respective premises the general information to the public about the products being dealt with by them and it would not reflect any soliciting of customers or induce the general public to buy the products dealt by the appellants and displayed on the board.” “In the instant case as noticed hereinabove, on the demand being raised both the appellants objected to the same and even before the ink on the objections so raised could dry or in other words even before it came to be considered they approached the High Court invoking the extra ordinary jurisdiction of the High court which was in due haste as such the dismissal of the petition though for a different reason which we have not subscribed our approval, yet the end result requires to be sustained and at the same breadth we hold that impugned notices are required to be adjudicated by the first respondent afresh in the light of objections filed to the said notices” the Court noted. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

Supreme Court rules Advertisement Tax not leviable on Signboards displaying Business information [Read Order]

Your free access to Taxscan has Expired

To read the article, get a premium account.

Taxscan Premium

Topics

Supreme Court rules Advertisement Tax not leviable on Signboards displaying Business information [Read Order]

Your free access to Taxscan has Expired

To read the article, get a premium account.

Taxscan Premium

Sign-up to receive exclusive news and promotions straight to your inbox!

Topics