Summary: The Bombay High Court supported the Pune Municipal Corporation's decision to raise the fees for putting up advertising billboards, rejecting claims by Manoj Madhav Limaye and other advertisers that the fees were too high or were actually a tax.
In a series of complaints, Manoj Madhav Limaye and other advertisers in Pune objected to the Pune Municipal Corporation's decision to increase fees for billboards and sky-signs. The case was about whether these fees were legal and if they were more like a tax than a fee.
The disagreement started when the Pune Municipal Corporation decided to raise the fees for putting up advertising billboards. Manoj Madhav Limaye and his fellow advertisers argued that this increase was not only too much but also like a tax, which they claimed the Corporation did not have the power to charge.
The court looked at what the fees were for and decided that they were regulatory fees, not taxes. Regulatory fees are meant to cover the cost of services provided by the government, in this case, the control and management of billboards and advertisements.
“The court decided that the fees were regulatory and not a tax, as they were meant to cover the costs related to managing the advertising structures.”
The Municipal Commissioner had initially set the new fee rates based on the highest bid received during a tender process. This decision was later approved by the General Body of the Municipal Corporation, allowing the new rates to be applied from April 1, 2013.
Manoj Madhav Limaye and other advertisers argued that applying the new fees from an earlier date was illegal. However, the court found that the Municipal Corporation had the authority to approve fees from an earlier date, as the law did not specifically require approval beforehand.
“The court noted that the term ‘sanction’ in the relevant rule did not mean that approval was needed beforehand, allowing for approval from an earlier date.”
The advertisers argued that the introduction of the Goods and Services Tax (GST) and the removal of a rule that allowed states to charge advertisement taxes meant the Corporation could no longer charge such fees. The court dismissed this argument, stating that the fees were not taxes and thus not affected by these changes.
The Bombay High Court's decision confirmed the Pune Municipal Corporation's right to manage advertising through license fees. The court highlighted the difference between fees and taxes, supporting the Corporation's ability to change fees to cover management costs.
