The Bombay High Court has ruled that the abolition of GST on advertisement tax does not restrict municipal corporations from levying licence fees on hoardings, billboards and sky-signs. Upholding the authority of civic bodies, the court dismissed a batch of petitions challenging the levy and enhancement of such fees by municipal corporations in Maharashtra.
A division bench comprising Justices G.S. Kulkarni and Advait Sethna observed that hoardings and sky-signs significantly influence the urban skyline, making their regulation a matter of public importance. The court cautioned against a narrow interpretation of municipal powers, stating that unregulated installation of such structures would lead to disorder and compromise public safety.
The petitions had questioned the decisions of the Pune, Nashik, Thane and Kolhapur municipal corporations to impose and increase licence fees for granting and renewing permissions for advertising structures. Rejecting the challenge, the court held that there was no illegality or arbitrariness in the fixation of fees and that the rates could not be termed excessive or discriminatory.
Referring to provisions of the Maharashtra Municipal Corporations Act, the bench clarified that municipal commissioners are empowered not only to regulate sky-signs and hoardings but also to levy and revise licence fees with the approval of the corporation. This authority, the court said, extends equally to the renewal of licences.
The High Court underscored that civic decisions in this domain are guided by considerations of public interest, which cannot be compromised for commercial gain. It noted that advertising infrastructure has evolved dramatically—from static painted boards to sophisticated digital screens capable of displaying multiple advertisements thereby increasing regulatory, safety and monitoring challenges for municipal authorities.
Terming the petitions as “luxury litigation,” the court remarked that the challenges were commercially motivated and aimed at boosting profits, while consuming substantial judicial time. Emphasising the need to regulate modern advertising structures in line with contemporary realities, the bench concluded that municipal corporations possess complete legal authority to levy licence fees for hoardings and sky-signs, notwithstanding changes in tax regimes.
