Stamp duty on advertisements: Supreme Court stays Bombay High Court order

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New Delhi | Published: March 27, 2017 10:24:11 PM

The Supreme Court today stayed the operation of a Bombay High Court verdict allowing levy of stamp duty by the Maharashtra government on advertisments in print and electronic media, saying it was a debatable issue.

The order came on the plea of the foundation against the high court?s order of October 27 last year by which it had upheld levy of stamp duty by the state government on advertising-related contracts. (PTI)

The Supreme Court today stayed the operation of a Bombay High Court verdict allowing levy of stamp duty by the Maharashtra government on advertisments in print and electronic media, saying it was a debatable issue. A bench of Justices Dipak Misra and A M Khanwilkar said, “We are of the considered opinion that the matter requires to be debated, especially keeping in view the sacrosanctity of freedom of speech and expression and involvement of electronic and print media… “Therefore, we direct that there shall be a stay of the operation of the judgement of the high court, subject to the member of the petitioner-foundation keeping accounts with itself and giving at least samples of ten agreements to the respondent state so that eventually at the time of final adjudication appropriate relief can be moulded,” it said. It also directed that each of the members of the petitioner Indian Broadcasting Foundation shall give a summary of revenue earned through advertisement.

The order came on the plea of the foundation against the high court’s order of October 27 last year by which it had upheld levy of stamp duty by the state government on advertising-related contracts.

The high court had rejected the writ petition filed by the advertising fraternity challenging the decision by the Maharashtra government to levy stamp duty.

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The apex court, in its order, noted the submissions of both the parties with the foundation contending that the state could not have levied stamp duty on the execution of the document pertaining to advertisement and what it cannot do directly cannot be permitted to done indirectly in law.

Senior advocate Arvind Dattar, appearing for the foundation, submitted, “The state legislature cannot impose tax on anything shown on electronic and print media, that is on the television, radio and newspaper.”

Dattar said, “If a huge revenue is taken away from the members of foundation, who are embedded to the cause of freedom of speech and expression that percolates the ethos pertaining to individual and collective expression, inevitably it will hamper freedom of speech and expression. That is not constitutionally permissible.”

Senior advocate K K Venugopal, appearing for Maharashtra, that the subject of levy of stamp duty comes within Lists II and III of the Constitution and the state legislature has the authority to legislate and, therefore, the judgment rendered by the high court is flawless.

The senior advocate further said that the argument that it affects the freedom of press and freedom of speech and expression as enshrined under Article 19(1)(a) of the Constitution of India, is “mercurial proponement” because levy of stamp duty has nothing to do with the concepts that have been highlighted by the counsel for the petitioner Foundation.

He said that “a state legislature can legislate touching the aspects of stamp duty for the purpose of revenue generation and it cannot be called a colorable exercise of power”.

Venugopal added that it is contended by him that duty is to be paid by the advertising agency or persons and, thereby, neither the electronic media nor the print media is affected.

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