THE HON’BLE SRI JUSTICE NOUSHAD ALI WRIT PETITION No.25133 of 2005 Date: 24.03.2011 Between: The Principal Chief Postmaster General, A.P. Circle, Hyderabad and another. … Petitioners and The Government of A.P., rep.by its Secretary, Municipal Administration, Secretariat, Hyderabad and others. … Respondents THE HON’BLE SRI JUSTICE NOUSHAD ALI WRIT PETITION No.25133 of 2005 ORDER : Heard Sri Ponnam Ashok Goud, learned Assistant Solicitor General appearing for the petitioners as well as the learned Government Pleader for Municipal Administration appearing for respondent No.1 and Dr. Y.Padmavathi, learned Standing Counsel appearing for respondent Nos.2 and 3 – Municipal Corporation of Hyderabad. 2. Union of India, representing Postal Department through the Principal Chief Postmaster General and Director of Postal Services, Andhra Pradesh Circle, Hyderabad, the petitioners herein, have challenged the proceedings Lr.No.307/AD2/Advt/MCH/2005/136, dated 2.5.2005/ 14.6.2005, issued by the 3rd respondent-Additional Commissioner (Advt.) demanding an amount of Rs.2,70,251/- towards advertisement tax in respect of the hoardings said to have been erected by the petitioners in the premises of the Post Offices in the twin cities of Hyderabad and Secunderabad, as arbitrary and illegal. 3. It is the case of the petitioners that some sign boards have been erected on the top of the Post Office Buildings and also outside the buildings for displaying advertisements of the products of Government of India, like Speed Post, Business Post, Express Post, e-Post, International Money Transfer etc. These hoardings have been erected for awareness of the public about the new services offered by the Department. Some of the sign boards are glow sign boards and some are painted and erected in front of the Post Office Buildings/on the top of the buildings. In strict sense, the Department is not undertaking any trade or business with any profiteering motive. The advertisement boards of the Department are not illuminated nor they are sky-sign boards. The functions and the responsibilities undertaken by the Department are service oriented and the sign boards/advertisement boards are not commercial in nature. The Postal Department is a part of Union of India and the property of the Union of India is exempt from all taxes imposed by the State or any other authority within the State. Thus, it is the contention of the learned counsel for the petitioners that the petitioners are under no obligation nor are they amenable to the tax jurisdiction of the respondent-Corporation. 4. The respondent-Corporation, however, has adopted a stand, as is evident from the impugned demand, that the petitioners were obliging and paying tax towards advertisement in the past years and, therefore, they should continue to pay tax and obtain renewal of licences for display of the hoardings. 5. Section 421 of the Greater Hyderabad Municipal Corporation Act, 1955 (for brevity “the Act”) provides that no person shall, without the written permission of the Commissioner, erect, exhibit, fix or retain any advertisement upon any land, building, wall, hoarding or structure. Under the proviso to the said section, such permission shall not be necessary in respect of any advertisement which is not an illuminated advertisement nor a sky- sign, provided (a) such advertisement is exhibited within the window of any building; or (b) when it relates to the trade or business carried on within the land or building upon 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; or to the trade or business carried on by the owner of any vehicle upon which such advertisement is exhibited; (c) or if such advertisement relates to the business of any railway administration; or (d) is exhibited within any railway station or upon any wall or other property of a railway administration except portion of the surface of such wall or property fronting any street. Clause (b) of sub-section (4) of Section 421 explains the expression “illuminated advertisement” as not an illuminated display of goods, if such display of goods merely bearing labels showing the name of the article or of its manufacturer or of both, and is made by lighting which is not in the opinion of the Commissioner more than is necessary to make the goods and labels visible at night. Therefore, clauses (a) and (b) of sub-section (1), read with clause (b) of sub-section (4) of Section 421 of the Act undoubtedly provide exemption from obtaining permission of the Commissioner for advertisements enumerated therein. The petitioners, as explained above, assert raising a specific plea that the advertisements undertaken by them strictly come within the exemption provided under the aforesaid provisions. In that regard, they had, in fact, made a representation dated 16.4.2004 followed by reminders dated 27.5.2004 and 15.4.2005. 6. These facts pleaded by the petitioners are jurisdictional facts, which alone would determine the application of Section 421 of the Act. Therefore, it would have been appropriate if the respondent Nos.2 and 3 had undertaken an exercise and ascertained the facts. Apparently, respondent Nos.2 and 3 have not undertaken any such exercise before fastening the liability on the petitioners. 7. The petitioners, in addition to the factual assertions made as above, would also seek to contend that the Union of India is not amenable to the tax domain of the respondent-Corporation. 8. For the aforesaid reasons, I am of the view that the respondent-Corporation shall reconsider the matter by ascertaining the facts pleaded by the petitioners and take a comprehensive decision in the matter. 9. Therefore, I deem it appropriate to pass the following order: (i) The petitioners shall submit a fresh representation pleading all its defences claiming exemption from the tax domain of respondent Nos.2 and 3, within a period of three weeks from the date of receipt of a copy of this order; (ii) on receipt of such representation, respondent Nos.2 and 3 shall consider the same and pass appropriate orders in accordance with law meeting all the defences raised by the petitioners, within a period of six weeks thereafter; and (iii) till a decision is taken as above and communicated to the petitioners, the demand pursuant to the impugned order shall be kept in abeyance. 10. Subject to the above direction, the writ petition is disposed of. There shall be no order as to costs. _________________________ JUSTICE NOUSHAD ALI 24.03.2011. Msr THE HON’BLE SRI JUSTICE NOUSHAD ALI WRIT PETITION No.25133 of 2005 24.03.2011 (Msr)