Hindustan Petroleum Corporation Ltd. v. V.A. Sofia and The Corporation of Cochin

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE** **TUESDAY, THE 25TH MARCH 2008 / 5TH CHAITHRA 1930** **CRP.No. 215 of 2006()** **---------------------** **AS.126/2003 of VI ADDL.DISTRICT COURT, ERNAKULAM OS.1533/2001 of I ADDL.MUNSIFF'S COURT,ERNAKULAM** **....................** ## **REVISION PETITIONER: APPELLANT/IST DEFENDANT:** **--------------------------------------------------------------------------------** **HISDUSTAN PETROLEUM CORPORATION LIMITED, TALAPURAM, ERNAKULAM, COCHIN-14.** **BY ADV.SRI.A.M.SHAFFIQUE SRI.E.K.NANDAKUMAR** **SRI.NITHIN GEORGE** ## **RESPONDENTS: PLAINTIFFS/2ND DEFENDANT:** **---------------------------------------------------------------------** **1. V.A.SOFIA, LICENSEE FOR COLLECTION OF ADVERTISEMENT TAX 2000-01 FOR CORPORATION OF COCHIN 1/1117(A), KUNNUMPURAM, KOCHI-682 001.** **2. CORPORATION OF COCHIN, REPRESENTED BY ITS SECRETARY, KOCHI-11.** **R1 BY ADV. SRI.M.A.ASIF** **R2 BY ADV. SRI.S.RAMESH BABU, SC.COCHIN CORPN.** **THIS CIVIL REVISION PETITION HAVING BEEN FINALLY HEARD ON 25/03/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** _Kss_ ## **PIUS C. KURIAKOSE, J.** .......................................................... C.R.P.No.215 OF 2006 ........................................................... DATED THIS THE 25TH MARCH, 2008 ## **ORDER** The Hindustan Petroleum Corporation Ltd., the 1[st] defendant in a suit for recovery of money by way of advertisement tax filed by the 1[st] respondent-plaintiff, licensee of the 2[nd] respondent-Corporation of Cochin for collection of advertisement tax 2000-01 is the petitioner in this Civil Revision Petition under Section 115 of the Code of Civil Procedure. The parties will be referred to by their ranks in the trial court for the sake of convenience. 2. According to the plaintiff, the right of collecting advertisement tax within the area of the Corporation of Cochin as notified by the 2[nd] respondent-Corporation of Cochin was tendered to her and as per the notification everybody who displays advertisements is bound to remit tax in advance before the display of advertisement boards. The 1[st] defendant displayed advertisement boards without remitting tax. In spite of several demands, the 1[st] defendant did not respond. Hence the suit for recovery of Rs.12,579/- towards arrears of tax and Rs.2880/- towards fine. 3. Through the written statement filed by the 1[st] defendant, the maintainability of the suit as well as the competence of the plaintiff to CRP.N0.215/2006 -2- institute a suit of the nature were seriously challenged. It was contended that in the absence of specific statutory provisions, right for action cannot be delegated. It was also contended that there was no provision in the statute enabling recovery of tax arrears and that the only remedy was to remove the unauthorised advertisements and to levy fine. It was further contended that Boards displayed are in the place where business is carried out by the 1[st] defendant and hence exempted under the Act. The boards were being displayed from time immemorial and at no point of time tax was ever demanded or paid. 4. The learned Munsiff formulated the following issues for trial: i) Whether the suit is maintainable? ii) Whether the plaintiff is entitled for a decree against the 2[nd] defendant? iii) Costs. The trial court evaluated the evidence which consisted of PW.1 and DW.1 and Exts.A1 to A7 and decreed the suit except to the extent it related to the sum of Rs.2880/- claimed by way of fine. 5. The learned Additional District Judge who considered the appeal filed by the petitioner-1[st] defendant, on re-appreciating the evidence, did not interfere with the trial court's judgment and decree CRP.N0.215/2006 -3- and dismissed the appeal. 6. Advocate Sri.A.M.Shaffique of M/s.Menon & Pai addressed me on behalf of the revision petitioner. Advocate Sri.M.A.Asif and Advocate Sri.S.Ramesh Babu would address me on behalf of the respondents. 7. A collection agent of advertisement tax to the Corporation of Cochin is not entitled to levy or impose any advertisement tax which is the statutory function of the Corporation, submitted Mr.A.M.Shaffique. The items of advertisements mentioned in the plaint were not levied with advetisement tax at any earlier occasion by the Corporation and the 1[st] respondent-plaintiff is not entitled to demand and recover advertisement tax. Referring to Section 271 of the Kerala Municipalities Act, Mr.Shaffique submitted that any advertisement which is not a sky sign displayed in the premises relating to trade or business carried on in the said land or building is not liable for any advertisement tax. The various advertisements in respect of which amounts are claimed in the suit are all relating to display boards, banners and other materials displayed in petrol pumps where petroleum products are being sold by the revision petitioner through its dealers. The courts below assumed without any evidence or CRP.N0.215/2006 -4- materials that all those advertisements are liable for tax. It had not been contended by the plaintiff that the advertisements in question were sky-signs and hence not eligible for exemption. Mr.Shaffique would place reliance on the judgment of the Division Bench of this Court in **Thomas Kurian v. Joseph Thomas** (2002 (2) KLT 625) in support of his submissions. 8. Mr.A.M.Asif, learned counsel for the 1[st] respondent-plaintiff would refute the submissions of Mr.Shaffique. He would place before me copies of the tender conditions subject to which his client was given the contract for collecting advertisement tax. He also placed before me copy of the contract entered into between the plaintiff and the Cochin Corporation. He relied on the judgment of the Division Bench in **P.V.Pathrose v. State** (1952 KLT 430). 9. Sri.S.Ramesh Babu, Standing Counsel for the Corporation would support the impugned judgments and decrees and would explain to me the procedure which is being adopted by the Corporation for levy of tax and for farming out the right to collect tax 10. The lower court records were called for and I have perused them. On going through the evidence on record in the case it is seen that the CRP.N0.215/2006 -5- lower appellate court's observation regarding the manner in which advertisements and display hoardings are mounted in the premises of the petitioner and also regarding the admissions of DW-1 (witness examined on behalf of the revision petitioner) are substantially correct. The photographs marked as Ext.A7 series by the trial court also show that the learned Additional District Judge's opinion that the hoardings and advertisement boards can be viewed from outside and that they will convey message not only for those customers who visit the revision petitioner's outlet for purchasing fuel and for getting other services but also to the general public is substantially correct. 11. Question whether the plaintiff to whom the Corporation has farmed out right to collect advertisement tax in the Corporation area is entitled to levy or impose advertisement tax does not arise in this case as rightly submitted by the Standing Counsel for the Corporation. The assessment is made by the Corporation who are competent to do so by virtue of Section 272 of the Act and what the plaintiff does is only to collect the tax from the exhibitors of advertisements on the basis of the right given to the plaintiff by the Corporation for such collection. The issue in my opinion is covered by the judgment of Division Bench of this Court in Pathrose v. State, 1952 KLT 430. CRP.N0.215/2006 -6- 12. As for the other question whether the courts below were justified in coming to a conclusion that the advertisement boards kept in a petrol pump where the revision petitioners trade is being carried on is liable for payment of advertisement tax and the further question whether the advertisement boards displayed in a petrol pump at a height of 10 ft. will amount to sky sign liable for tax as provided under section 271 of the Municipalities Act, I am of the view that these questions have been in substance answered by the lower appellate court correctly. Of course the lower appellate court does not raise a specific question as to whether the advertisement boards which are admittedly erected in the business premises of the revision petitioner and would normally attract clause (b) of the 4[th] proviso to section 271 of the Municipalities Act are actually sky signs which are exempted from the purview of that proviso. The explanation II to Section 721 defines the expression “sky sign” as meaning any advertisement supported on or attached to any post, pole, standard, frame work or other support wholly or in part upon or over any land, building, wall or structure which, or any part of which, sky-sign shall be visible against the sky from some point in any public place and includes all and every part of any such post, pole, standard, frame work or other support. CRP.N0.215/2006 -7- The expression “sky-sign” shall also include any balloon, parachute or other similar device employed wholly or in part for the purposes of any advertisement upon or over any land, building or structure or upon over any public place, but shall not include – - (a) any flagstaff, pole, vane, or weather-cock, unless adapted or used wholly or in part for the purpose of any advertisement or - (b) any sin, or any board, frame or other contrivance securely fixed to or on the top of the wall or parapet of any building, or on the cornice or blocking course of any wall, or to the ridge of a roof; provided that such board, frame or other contrivance be of one contiguous face and not open work, and do not extend in the height more than one metre above any part of the wall or parapet or ridge to, against or on which it is fixed or supported; or - (c) any advertisement relating to the name of the land or building, upon or over which the advertisement is exhibited, or to the name of the owner or occupier of such land or building; or - (d) any advertisement relating exclusively to the business of a railway administration ... ...... (e) .................” The evidence of DW-1 before the court below regarding the display hoardings were that the light posts are erected at a height of 15 ft. and that the boards are not displayed inside the petitioner's building. Of course DW-1 denied the suggestion that the boards are installed for CRP.N0.215/2006 -8- attracting the public. But DW-1 admitted that the boards can be viewed from outside as well. As noticed by the lower appellate court the plaintiff's version that the revision petitioner exhibited advertisements which are liable to pay advertisement tax was not controverted or challenged in cross examination of PW-1. The court also noticed that advertisements and display boards are mounted on a rail post having a height of 7 feet and display is effected above 10 feet. In my opinion the hoardings and display boards errected by the petitioner will come within the scope of `sky sign'. 13. At any rate I do not find any perversity or jurisdictional infirmity about the findings concurrently entered by the court below so as to warrant invocation of the revisional jurisdiction of this court under section 115 of the Code of Civil Procedure. Civil Revision Petition stands dismissed. Tgl/ksv **(PIUS C.KURIAKOSE, JUDGE)** CRP.N0.215/2006 -9- CRP.N0.215/2006 -10-